Multi-billion dollar mortgage settlement
In Februay, the historic $25 billion mortgage settlement was finalized between 49 states’ attorneys general, the federal government and America’s largest mortgage servicers Bank of America, JPMorgan Chase, Wells Fargo, Cigitroup and Ally Financial for illegal foreclosure practices.
Settlement details were not made completely public immediately, but the the U.S. Department of Justice has filed agreements with all five servicers separately, each consisting of over 300 pages in which relief measures were outlined in detail that will go toward helping underwater borrowers and victims of illegal foreclosures. Relief measures and details on how foreclosures would be handled in the future were formerly only made public by statements to the press by officials and single page summaries.
The settlement that stalled repeatedly for over a year is still pending final judicial approval, but is expected to be approved.
Full breakdown of the settlement
Click the image below to enlarge:
- $3 billion: total amount banks can be credited for offering refinancing to homeowners that are underwater
- $17 billion: total amount banks can be credited for offering loan modifications ($10 billion) and other forms of relief for underwater borrowers, separate from the refinancing incentives above ($7 billion)
- $1.5 billion: direct payments to homeowners who were wrongfully foreclosed upon between 2008 and 2011
- $2.75 billion: amount paid directly to the 49 states that negotiated the settlement, varying by state and going toward foreclosure prevention
- $750 million: amount that will go toward the resolution of federal claims
Alternative overview:
- $17 billion: to fund the national commitment to foreclosure relief efforts
- $3 billion: to fund the national commitment to underwater mortgage refinance program
- $5 billion: to fund payments to 49 states and federal government
Additional details:
- 750,000: expected to qualify for direct payments in the $1.5 billion payment fund
- $2,000: estimated average payout
- 11.1 million: homes underwater in America
- 3 million: distressed sales since January 2009
- 1.4 million: homes currently in the foreclosure process
Note that the $17 billion portion of the mortgage settlement is not only the largest, but may be expanded up to $32 billion in coming years to support direct borrower relief through principle reduction, short sales, anti-blight measures, borrower transition efforts, etc.
Also of note, this landmark settlement represents one of the largest in America, second only to the historic government settlement with the tobacco industry.
Additional data:
Settlement documents:
- Complaint (pdf)
- Ally/GMAC Settlement (pdf)
- Bank of America Settlement (pdf)
- Citi Settlement (pdf)
- JPMorgan Chase Settlement (pdf)
- Wells Fargo Settlement (pdf)
Additional information:
- Settlement Executive Summary (pdf)
- Settlement Fact Sheet (pdf)
- Benefits to Servicemembers and Veterans (pdf)
- Servicing Standards Highlights (pdf)
Settlement parties:
- Ally/GMAC: 800-766-4622
- Bank of America: 877-488-7814
- Citi: 866-272-4749
- JPMorgan Chase: 866-372-6901
- Wells Fargo: 800-288-3212
- State Attorneys General
- Conference of State Bank Supervisors
- United States Department of Justice
- U.S. Department of Housing and Urban Development
