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Statements: AGs Kamala Harris and Eric Schneiderman on mortgage settlement
Attorney General Kamala D. Harris Secures $18 Billion California Commitment for Struggling Homeowners
LOS ANGELES - Attorney General Kamala D. Harris today announced an historic commitment to California of up to $18 billion that will benefit hundreds of thousands of homeowners in the state hardest hit by the mortgage crisis.
"California families will finally see substantial relief after experiencing so much pain from the mortgage crisis," said Attorney General Harris. "Hundreds of thousands of homeowners will directly benefit from this California commitment."
"This outcome is the result of an insistence that California receive a fair deal commensurate with the harm done here. We insisted on homeowner relief for Californians and demanded enforceability so homeowners actually see a benefit that will allow them to stay in their homes, and preserved our ability to investigate banker crime and predatory lending," continued Harris.
California secured the $18 billion agreement as part of a national multistate settlement to penalize robo-signing and other bank servicing and foreclosure misconduct. The agreement comes after California departed from the multistate negotiations last September when the estimated relief to California was $4 billion. Attorney General Harris insisted on more relief for the most distressed homeowners, meaningful enforcement, and the ability of California and other states to pursue investigations into misconduct.
California's participation in the settlement also increased the amount of relief other states will receive by approximately $6 billion.
Attorney General Harris also obtained separate, enforceable guarantees to ensure that banks will be accountable for their commitments to California. As part of the separate California guarantee, banks must enact a minimum of $12 billion in principal reductions for California homeowners. Failure to achieve this minimum level of reductions will result in substantial cash payments of up to $800 million that the banks will have to pay to the state. Unlike the larger multistate agreement, which is enforceable in a federal court in Washington, D.C., this payment provision empowers the Attorney General to summon the banks to California state court.
California's separate guarantee also creates important incentives to ensure that banks will reduce the principal mortgage balance of underwater homeowners in California's hardest-hit counties and that the principal reductions in these communities will occur within the first year of the settlement.
To speed investigations and strengthen prosecutions of these mortgage cases, California will expand its Mortgage Fraud Strike Force, adding to the more than 42 members already working on the team. The state will continue its investigative alliance with Nevada, that allows the sharing of resources, information and strategies, and will look to collaborate with additional states focused on a law enforcement response to the wave of mortgage fraud.
The national multistate agreement and California commitment will provide substantial relief for thousands of Californians whose mortgages are owned by the five banks in the settlement, but thousands more will still need help as they struggle to stay in their homes.
"I will continue to fight for principal reductions for the approximately 60 percent of California homeowners whose loans are owned by Fannie Mae and Freddie Mac," Attorney General Harris added.
Attorney General Harris will propose a comprehensive legislative agenda to protect homeowners in the mortgage market. This legislation will build on the three-year reforms agreed to as part of the California commitment, including a single point of contact for mortgage-holders and an end to the unfair and confusing system of dual-track foreclosures.
"This is an historic amount of relief for California homeowners, but it is one piece of a broader focus. We will continue our crackdown on mortgage fraud and quickly move to pass legislation that will simplify, reform and upgrade our broken mortgage system," Harris added.
The financial benefits of this historic agreement extend to homeowners whose loans are owned or serviced by one of the five largest mortgage lenders. Benefits include:
LOS ANGELES - Attorney General Kamala D. Harris today announced an historic commitment to California of up to $18 billion that will benefit hundreds of thousands of homeowners in the state hardest hit by the mortgage crisis.
"California families will finally see substantial relief after experiencing so much pain from the mortgage crisis," said Attorney General Harris. "Hundreds of thousands of homeowners will directly benefit from this California commitment."
"This outcome is the result of an insistence that California receive a fair deal commensurate with the harm done here. We insisted on homeowner relief for Californians and demanded enforceability so homeowners actually see a benefit that will allow them to stay in their homes, and preserved our ability to investigate banker crime and predatory lending," continued Harris.
California secured the $18 billion agreement as part of a national multistate settlement to penalize robo-signing and other bank servicing and foreclosure misconduct. The agreement comes after California departed from the multistate negotiations last September when the estimated relief to California was $4 billion. Attorney General Harris insisted on more relief for the most distressed homeowners, meaningful enforcement, and the ability of California and other states to pursue investigations into misconduct.
California's participation in the settlement also increased the amount of relief other states will receive by approximately $6 billion.
Attorney General Harris also obtained separate, enforceable guarantees to ensure that banks will be accountable for their commitments to California. As part of the separate California guarantee, banks must enact a minimum of $12 billion in principal reductions for California homeowners. Failure to achieve this minimum level of reductions will result in substantial cash payments of up to $800 million that the banks will have to pay to the state. Unlike the larger multistate agreement, which is enforceable in a federal court in Washington, D.C., this payment provision empowers the Attorney General to summon the banks to California state court.
California's separate guarantee also creates important incentives to ensure that banks will reduce the principal mortgage balance of underwater homeowners in California's hardest-hit counties and that the principal reductions in these communities will occur within the first year of the settlement.
To speed investigations and strengthen prosecutions of these mortgage cases, California will expand its Mortgage Fraud Strike Force, adding to the more than 42 members already working on the team. The state will continue its investigative alliance with Nevada, that allows the sharing of resources, information and strategies, and will look to collaborate with additional states focused on a law enforcement response to the wave of mortgage fraud.
The national multistate agreement and California commitment will provide substantial relief for thousands of Californians whose mortgages are owned by the five banks in the settlement, but thousands more will still need help as they struggle to stay in their homes.
"I will continue to fight for principal reductions for the approximately 60 percent of California homeowners whose loans are owned by Fannie Mae and Freddie Mac," Attorney General Harris added.
Attorney General Harris will propose a comprehensive legislative agenda to protect homeowners in the mortgage market. This legislation will build on the three-year reforms agreed to as part of the California commitment, including a single point of contact for mortgage-holders and an end to the unfair and confusing system of dual-track foreclosures.
"This is an historic amount of relief for California homeowners, but it is one piece of a broader focus. We will continue our crackdown on mortgage fraud and quickly move to pass legislation that will simplify, reform and upgrade our broken mortgage system," Harris added.
The financial benefits of this historic agreement extend to homeowners whose loans are owned or serviced by one of the five largest mortgage lenders. Benefits include:
- More than $12 billion is guaranteed to reduce the principal on loans or offer short sales to approximately 250,000 California homeowners who are underwater on their loans and behind or almost behind in their payments.
- $849 million is estimated to be dedicated to refinancing the loans of 28,000 homeowners who are current on their payments but underwater on their loans.
- $279 million will be dedicated to offering restitution to approximately 140,000 California homeowners who were foreclosed upon between 2008 and December 31, 2011.
- $1.1 billion is estimated to be distributed to homeowners for unemployed payment forbearance and transition assistance as well as to communities to repair the blight and devastation left by waves of foreclosures, targeted at 16,000 recent foreclosures.
- $3.5 billion will be dedicated to relieving 32,000 homeowners of unpaid balances remaining when their homes are foreclosed.
- $430 million in costs, fees and penalty payments.
A.G. SCHNEIDERMAN SECURES $136 MILLION FOR STRUGGLING NEW YORK HOMEOWNERS IN MORTGAGE SERVICING SETTLEMENT
After Schneiderman’s Persistence, Narrow Settlement Preserves Sweeping Legal Claims For Housing Crisis Misconduct That Has Not Yet Been Investigated
New York To Receive More Per Underwater Borrower Than Any Other State, Plus Loan Modifications, Principal Reductions
Schneiderman: Civil & Criminal Investigations Will Continue As We Seek Accountability For Those Responsible For Crisis And Leverage Greater Relief For Homeowners
NEW YORK – Winning his long, persistent demand that a wide array of sweeping civil and criminal claims not be released without investigation, Attorney General Eric T. Schneiderman announced today a $136 million settlement for New York with the nation’s five largest mortgage servicers over foreclosure abuses, the most per “underwater” borrower of any state in the nation, and the fourth highest dollar amount nationwide as part of the federal-state settlement. In addition to penalties for past abuses, the settlement includes direct relief to victims of wrongful foreclosure conduct, loan modifications including principal reductions for struggling homeowners, and funds that can be used to support foreclosure legal assistance and housing counseling programs. Today’s settlement, which also imposes strong national standards for mortgage servicing, fulfills Attorney General Schneiderman’s demand that he retain the right to bring legal action over misconduct that has not yet been investigated, a right that was absent from earlier settlement proposals.
“Thanks to the advocacy and support of Americans across the country, we have preserved the right to continue investigating the misconduct that led to the bubble and crash of the housing market. For a year, the proposed settlement was simply inadequate, and I applaud all those who fought with us to hold banks accountable for their role in the foreclosure crisis, provide meaningful relief to New York’s struggling homeowners, and allow a full airing of the facts to ensure that abuses of this scale never happen again,” said Attorney General Schneiderman. “On multiple fronts, we will continue to investigate the mortgage crisis that has impacted communities in every corner of this state, and ensure that justice and accountability prevail.”
Over the past year, Attorney General Schneiderman fought for a fair national settlement, on behalf of New York’s homeowners, for mortgage servicing abuses, making it clear that he would not sign an agreement that would give financial institutions broad legal immunity for conduct that had not been investigated. Until recently, the language in settlement proposals had been too broad to justify reaching an agreement. Today’s settlement is a vast improvement, and it will allow the Office of the Attorney General and other agencies to investigate and bring appropriate civil and criminal actions.
New York’s estimated share of the guaranteed cash payments in the settlement is $136 million, the fourth highest in the nation. New York will be able to distribute these funds to legal aid, homeowner assistance and advocacy organizations to help distressed individuals facing foreclosure or servicer abuse.
Among the critical legal claims Attorney General Schneiderman fought for, and successfully preserved in today’s settlement are:
http://www.ag.ny.gov/media_center/2012/feb/feb09a_12.html
After Schneiderman’s Persistence, Narrow Settlement Preserves Sweeping Legal Claims For Housing Crisis Misconduct That Has Not Yet Been Investigated
New York To Receive More Per Underwater Borrower Than Any Other State, Plus Loan Modifications, Principal Reductions
Schneiderman: Civil & Criminal Investigations Will Continue As We Seek Accountability For Those Responsible For Crisis And Leverage Greater Relief For Homeowners
NEW YORK – Winning his long, persistent demand that a wide array of sweeping civil and criminal claims not be released without investigation, Attorney General Eric T. Schneiderman announced today a $136 million settlement for New York with the nation’s five largest mortgage servicers over foreclosure abuses, the most per “underwater” borrower of any state in the nation, and the fourth highest dollar amount nationwide as part of the federal-state settlement. In addition to penalties for past abuses, the settlement includes direct relief to victims of wrongful foreclosure conduct, loan modifications including principal reductions for struggling homeowners, and funds that can be used to support foreclosure legal assistance and housing counseling programs. Today’s settlement, which also imposes strong national standards for mortgage servicing, fulfills Attorney General Schneiderman’s demand that he retain the right to bring legal action over misconduct that has not yet been investigated, a right that was absent from earlier settlement proposals.
“Thanks to the advocacy and support of Americans across the country, we have preserved the right to continue investigating the misconduct that led to the bubble and crash of the housing market. For a year, the proposed settlement was simply inadequate, and I applaud all those who fought with us to hold banks accountable for their role in the foreclosure crisis, provide meaningful relief to New York’s struggling homeowners, and allow a full airing of the facts to ensure that abuses of this scale never happen again,” said Attorney General Schneiderman. “On multiple fronts, we will continue to investigate the mortgage crisis that has impacted communities in every corner of this state, and ensure that justice and accountability prevail.”
Over the past year, Attorney General Schneiderman fought for a fair national settlement, on behalf of New York’s homeowners, for mortgage servicing abuses, making it clear that he would not sign an agreement that would give financial institutions broad legal immunity for conduct that had not been investigated. Until recently, the language in settlement proposals had been too broad to justify reaching an agreement. Today’s settlement is a vast improvement, and it will allow the Office of the Attorney General and other agencies to investigate and bring appropriate civil and criminal actions.
New York’s estimated share of the guaranteed cash payments in the settlement is $136 million, the fourth highest in the nation. New York will be able to distribute these funds to legal aid, homeowner assistance and advocacy organizations to help distressed individuals facing foreclosure or servicer abuse.
Among the critical legal claims Attorney General Schneiderman fought for, and successfully preserved in today’s settlement are:
- All criminal claims.
- All claims based on mortgage securitization misconduct, under securities fraud statutes, including New York’s Martin Act, and other sources of law. This includes securitization claims based on servicing, foreclosure or origination-related facts.
- All claims directly against the private national mortgage electronic registry system known as MERS, as well as claims against financial institutions for the use of MERS in the Attorney General’s recently filed lawsuit over a wide range of deceptive and fraudulent practices in New York.
- All claims for violations of fair lending lawsthat relate to discriminatory practices in loan origination.
- All tax claims, including any claim that the failure to transfer mortgage loans to the securitization trusts or other conduct violated tax rules.
- All claims by counties for lost mortgage recording fees; and
- All claims and defenses held by private and third parties, including those held by individual mortgage loan borrowers.
http://www.ag.ny.gov/media_center/2012/feb/feb09a_12.html
6 replies
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Wow! Talk about your "must see TV"…
I never thought I'd live to see Matt Taibbi positively giddy about a settlement with the banksters.
