Miss. joins $25 billion settlement on foreclosure wrongs

From The Mississippi Link Newswire

JACKSON – Mississippi is now part of the $25 billion joint federal-state agreement with the nation’s five largest mortgage servicers over foreclosure abuses and fraud, and unacceptable nationwide mortgage servicing practices, Attorney General Jim Hood said.

The proposed agreement provides an estimated $47.1 million in direct relief to Mississippi homeowners and addresses future mortgage loan servicing practices.

“This agreement is very significant in how it addresses the fraud that these banks committed against many homeowners across our state,” said Attorney General Hood. “This agreement not only provides much needed relief to Mississippi borrowers, but it also puts a stop to many of the bad behaviors that contributed to the mortgage mess in our state and across the country.”

The state’s estimated share of the settlement is $47,166,500.84.

  • Mississippi’s borrowers will receive an estimated $13,192, 086.61 in benefits from loan term modifications and other direct relief.
  • Mississippi borrowers who lost their home to foreclosure from January 1, 2008 through December 31, 2011 and suffered servicing abuse would qualify for $8,471,180.23.
  • The value of refinanced loans to Mississippi’s underwater borrowers would be an estimated $11.2 million.
  • The state will receive a direct payment of $14.2 million.

On Jan. 27, U.S. Attorney General Eric Holder along with Housing and Urban Development (HUD) Secretary Shaun Donovan, Securities and Exchange Commission (SEC) Director of Enforcement Robert Khuzami and New York Attorney General Eric Schneiderman announced the formation of the Residential Mortgage-Backed Securities Working Group.

The working group will investigate those responsible for misconduct contributing to the financial crisis through the pooling and sale of residential mortgage-backed securities.

“This agreement addresses breakdowns in the mortgage servicing industry, and allows us to pursue other mortgage-related misconduct,” said Hood. “It also puts in place new protections for homeowners in the form of mortgage servicing standards. These providers now have to take additional steps before they can foreclose on someone’s home. That’s not something we would see if we simply won a money judgment in a trial. A monitor will be put in place to oversee the financial institutions that are covered under the agreement.”

The agreement does not prevent the States from pursuing a criminal investigation or private individuals from pursuing their own claims.

Attorney General Hood said: “Some of the culprits of our economic collapse should go to jail. I will continue with our securities suits against some of these banks and the ratings agencies which condoned these fraudulent securities. These are the very kind of cases our leadership in the Mississippi House of Representatives wants to try and stop me from being able to pursue. They want to strip the Attorney General of power just to make a political statement that sides with corporate wrongdoers and against the best interests of our State.”

The final agreement, through a consent judgment, will be filed in U.S. District Court in Washington, D.C., and will have the authority of a court order.

Because of the complexity of the mortgage market and this agreement, which will span a three year period, in some cases participating mortgage servicers will contact borrowers directly regarding loan modification options. However, borrowers should contact their mortgage servicer to obtain more information about specific loan modification programs and whether they qualify under terms of this settlement. Settlement administrators or state attorneys general may also contact borrowers regarding certain aspects of the settlement.

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