Nearly a year of intense negotiations over mortgage servicing and foreclosure abuses has resulted in the largest consumer financial protection settlement in U.S. history. Thousands of Washington state homeowners who have already lost their homes or are struggling with mortgages larger than the value of their property stand to benefit.
Attorney General Rob McKenna’s Consumer Protection Division has been conducting its own investigation since May 2010 into reports of lenders and trustee services not properly reviewing foreclosure documents or following other legal procedures. McKenna sent letters in October 2010 and April 2011, outlining concerns and calling on trustees to suspend questionable foreclosures in the state. In August 2011, he announced a lawsuit against ReconTrust Company, a subsidiary of Bank of America, for conducting illegal foreclosures on thousands of Washington homeowners. The office is investigating more than a dozen other trustees for suspected violations.
Under Attorney General McKenna, the Attorney General’s Office helped negotiate billions in settlements with banks involved in mortgage lending, including Wells Fargo/Wachovia/Golden West/World Savings Bank, Bank of America/Countrywide, Ameriquest, and Household Financial. McKenna’s Consumer Protection Division has also brought civil suits against several businesses and individuals that promised to help save homes from foreclosure (for a fee) but then failed to do so.
Bank of America Corporation, JPMorgan Chase & Co., Wells Fargo & Company, Citigroup, Inc., and Ally Financial, Inc. (formerly GMAC) have agreed to an aggressive new effort to reduce monthly mortgage payments for millions of struggling homeowners – including some who are current with their payments but, because they owe more than their home is worth, don’t currently qualify for a refinance. One-time payments will go to many who already lost their homes. The settlement also puts in place a long list of new protections for mortgage-holders – especially those on the brink of foreclosure.
For more on this, you can visit the Attorney General’s website.