On behalf of Law Offices of Mark M. Kratter, LLC on February 24, 2012
When the housing crisis hit Connecticut in 2008, many homeowners found themselves suddenly unable to meet their financial obligations -- often, through no fault of their own. Indeed, many homeowners who were fighting off foreclosure were the victims of improper practices by mortgage servicers like Citibank or Bank of America. These mortgage servicers were subsequently involved in a robo-signing scandal; that is, they were failing to properly review foreclosure documents, including even failing to verify their authenticity.
The robo-signing scandal, which came to light in 2010, led to an aggressive prosecution of the nation's largest mortgage servicers. However, many may be interested to know that the banks, state and federal authorities recently reached a $25 billion settlement. Under the terms of the settlement, Connecticut will receive nearly $200 million.
The bulk of Connecticut's portion of the funds will go toward beleaguered borrowers in the state whose mortgage is serviced by any one of Citibank, Bank of America, JP Morgan Chase, Wells Fargo, or Ally Bank. These borrowers may be able to receive a mortgage modification, including even a reduction in the principal. In addition, those who have already lost their homes to foreclosure will qualify for a payment of around $1,500 to $2,000.
It is important to note that this only applies to borrowers whose mortgage is serviced by any one of the five servicers listed above. Moreover, while $1,500 will certainly help those who are unable to meet their financial obligations, it is merely a small pittance compared to losing one's home to a foreclosure. For those who are currently facing foreclosure, though, options such as declaring bankruptcy may be available in order to prevent losing one's home.
Source: Hartford Courant, "Mortgage Abuse Settlement With Giant Banks Means Nearly $200M For Connecticut," Kenneth R. Gosselin, Feb. 9, 2012
