Ala. joins $25B mortgage settlement

MONTGOMERY, Ala. (WALA) - Attorney General Luther Strange Thursday formally joined a landmark $25 billion national joint federal-state agreement with the nation’s five largest mortgage servicers over foreclosure abuses and fraud, and unacceptable nationwide mortgage servicing practices.

The proposed agreement provides an estimated $ 106,701,096 in direct relief to Alabama homeowners and addresses future mortgage loan servicing practices.

U.S. Attorney General Eric Holder, U.S. Housing and Urban Development (HUD) Secretary Shaun Donovan and a bipartisan group of state attorneys general announced the settlement in Washington, D.C.

“This agreement not only provides much needed relief to Alabama 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,” said Attorney General Strange.

The state’s estimated share of the settlement is $106,701,096.

• Alabama’s borrowers will receive an estimated $29,879,070 in benefits from loan term changes and other relief.
• Alabama’s borrowers who lost their home to foreclosure from January 1, 2008 through December 31, 2011, and encountered servicing abuse would qualify for $20,595,756 in payments to borrowers.
• The value of refinanced loans to Alabama’s underwater borrowers would be an estimated $29,751,516.
• The state will receive a direct payment of $26,474,753 directed to the Attorney General’s Office.

The unprecedented joint state-federal settlement is the result of a massive civil law enforcement investigation and initiative that includes state attorneys general and state banking regulators across the country, and nearly a dozen federal agencies.

The settlement holds banks accountable for past fraud and abuses and provides relief to homeowners. With the backing of a federal court order and the oversight of an independent monitor, the settlement stops future fraud and abuse.