Feb 9 Thousands of Prince George’s County Homeowners to Benefit from National Mortgage Settlement (2012)

Press Release
For Immediate Release:
February 9, 2012

For Information Contact:
Scott L. Peterson
Deputy Manager of Communications/Press Secretary
Office of Prince George’s County Executive Rushern L. Baker, III

Thousands of Prince George’s County Homeowners to Benefit from National Mortgage Settlement

Nationwide settlement will bring nearly $1 billion in benefits to distressed homeowners in Maryland

Upper Marlboro, MD – Yesterday, Prince George’s County Executive Rushern L. Baker, III joined Maryland Attorney General Douglas Gansler, Congresswoman Donna Edwards, Maryland Secretary of Housing and Community Development Raymond Skinner, and Director of the Prince George’s County Department of Housing and Community Development Eric Brown to announce the State’s entrance into a settlement with the five largest mortgage servicers in America. The settlement, which resulted from an investigation into foreclosure abuse and fraud, will result in nearly $1 billion in monetary benefits for Maryland homeowners. Relief will take the form of enhanced loan modifications, refinancing options, and other services. Approximately, one-third of the total amount of foreclosures in the State of Maryland are in Prince George’s County.

“This landmark settlement is the culmination of a long fight to bring justice and compensation to the victims of foreclosure fraud and abuse,” said County Executive Rushern L. Baker, III. “I want to thank the Attorney General, our political leaders, and all of the housing counselors, non-profits, faith-based organizations and citizens who have done their part to help families affected by foreclosure.”

The largest of its kind in Maryland’s history, this settlement was reached by the Maryland Office of the Attorney General, the Department of Labor, Licensing, and Regulation's Office of the Commissioner of Financial Regulation, the Federal government, and the nation's five largest mortgage servicers: Wells Fargo, Bank of America, Citi, JP Morgan Chase, and Ally Bank/GMAC. Maryland’s agreement is part of a national government-industry settlement backed by more than 40 states and totaling $26 billion.

"This historic settlement provides much deserved compensation and support to homeowners who have been victimized by the banking industry and will go a long way toward ending the unfair and fraudulent practices that caused so much damage and loss to citizens and communities throughout our state," said Prince George’s County Council Chair Andrea Harrison.

The settlement money will be used for:
·         Individual payments to borrowers who were victims of these banks' unfair servicing practices and were foreclosed upon between January 1, 2008 and December 31, 2011;
·         Loss mitigation programs, such as loan modifications (including principal reductions), forbearance plans, and short sales for homeowners with loans serviced by the five big banks who are behind or very likely to soon fall behind on their mortgage payments due to financial circumstances;
·         Refinancing for homeowners with loans owned and serviced by the five big banks who are current in their payments but who owe more than their homes are worth; and
·         Housing counseling and other state-level foreclosure prevention and housing programs.

The settlement includes measures that ensure compliance on the part of banks, including an independent monitor. It also includes incentives to encourage compliance, including a large monetary penalty for banks that do not meet their targeted distributions.

“We are delighted to get homeowners this type of help right now,” said Eric C. Brown, Director of the Prince George’s County Department of Housing and Community Development.  Our office will do everything in its power to get this information out to residents of Prince George’s County who can benefit from this settlement and direct them on how to obtain assistance.”

General Information for the Borrower

·         Over the next 30 to 60 days, settlement negotiators will be selecting an administrator to handle the logistics of the settlement and monitor compliance.
·         Over the next six to nine months, the settlement administrator, attorneys general and the mortgage servicers will work to identify homeowners eligible for the cash payments, principal reductions and refinancing. Eligible borrowers will receive letters.
·         This settlement will be executed over the next three years.

Key Provisions of the Settlement
·         Aid to homeowners needing loan modifications now, including first and second lien principal reduction. The servicers are required to work off an estimated $761 million in principal reduction and other forms of loan modification relief for homeowners in Maryland.
·         Aid to borrowers who are current in their payments but whose homes are worth less than the mortgage loan amount. Eligible borrowers will be able to refinance at today’s historically low interest rates. Servicers will have to provide an estimated $54 million in financing relief for homeowners in Maryland.
·         Payments to eligible borrowers who lost their homes to foreclosure without losing your right to sue the banks. An estimated $18 million will be distributed to thousands of borrowers in Maryland.
·         First ever nationwide reforms to bank servicing standards. These servicing standards require:
·         No more “robo-signing”
·         Adequate staffing levels and training to assist borrower’s needs
·         Required written notifications from the bank (Open your mail.)
·         Severe limits on banks to initiate foreclosure during the loan modification process
·         Prohibiting unreasonable and excessive fees

Who is Eligible?
·         Eligibility for these benefits depends on many factors. We urge you to contact a trained nonprofit housing counselor as soon as possible. Call the Maryland HOPE Hotline at 1-887-462-7555. They can put you in touch with a nonprofit housing counselor in your area. (More information below.)
·         If you make or made mortgage payments to one of these five banks you may be eligible for benefits provided by the settlement. The toll-free hotline numbers listed below have been set up by these banks to speak with borrowers about this settlement.

Ally/GMAC: 1-800-766-4622
Bank of America: 1-877-488-7814
JPMorgan Chase: 1-866-372-6901
Wells Fargo: 1-800-288-3212

Housing Counselors
·         Talk to an independent nonprofit housing counselor as soon as possible. An independent nonprofit housing counselor is someone who knows the complicated issues surrounding home mortgages and foreclosure and can help you deal with your bank.
·         Maryland has been in the forefront nationally in helping homeowners connect with nonprofit housing counselors in your area through the Maryland HOPE Hotline.
·         Maryland HOPE Hotline: 1-887-462-7555
·         Website: http://mdhope.org
·         Be wary of “foreclosure scams”. Borrowers are urged to beware of people promising to assist them with guaranteed results of a loan modification FOR A FEE. It is likely a scam.

Enforcement Provisions
·         Attorneys General oversight of national banks.
·         National banks will be required to regularly report compliance with the settlement to an independent, outside monitor that reports to state Attorneys General.
·         Servicers will have to pay heavy penalties for non-compliance, including missed deadlines.

Where do we go from here?
·         Banks are not off the hook.
·         People still have the right to sue the banks
·         Banks are not immune from criminal prosecution
·         Governmental entities and private parties are aggressively pursuing securities cases against the banks.
·         A joint federal-state task force has been formed to investigate and prosecute those responsible for the collapse of the mortgage lending and investment markets.