2. The Settlements
Independent Foreclosure Review Settlement
April 2011
Foreclosures in 2009-2010
Independent Consultants Review Foreclosure
Multi-State Settlement of Foreclosure Misconduct
February 2012
Foreclosures in 2008-2011
Multiple Potential Avenues for Recovery
Can be Eligible for Relief from Both Settlements
3. Independent Foreclosure
Review
Federal Reserve Board Enforcement Actions
Independent Consultants to Review Foreclosures that were
Initiated, Pending, or Completed between 2009 and 2010
Financial Harm from Errors, Misrepresentations, or other
Deficiencies during the Foreclosure Process
3 Criteria:
Property Securing Loan was Primary Residence
Property in Foreclosure Process: 1/1/09 – 12/31/10
Mortgage Serviced by one of 27 Institutions
4. The 27 Institutions:
• America’s Servicing Co.
• Aurora Loan Services
• BAC Home Loans Servicing
• Bank of America
• Beneficial
• Chase
• Citibank
• CitiFinancial
• CitiMortgage
• Countrywide
• EMC
• EverBank/EverHome
Mortgage Company
• Financial Freedom
• GMAC Mortgage
• HFC
• HSBC
• IndyMac Mortgage Services
• MetLife Bank
• National City Mortgage
• PNC Mortgage
• Sovereign Bank
• SunTrust Mortgage
• U.S. Bank
• Wachovia Mortgage
• Washington Mutual (WaMu)
• Wells Fargo Bank, N.A.
• Wilshire Credit Corporation
Independent Foreclosure
Review
5. 4.3 Million Eligible Borrowers
Only 90,000 claims filed to date
Eligible Borrowers Received Materials Oct/Nov
11’
Deadline: July 31, 2012 to Submit
Applications
Improper Charge for a Single Fee Qualifies
Could be Relatively Large Claims
Several Months to Complete Review
Independent Foreclosure
Review
6. Multi-State Settlement of
Foreclosure Misconduct
$26 Billion Settlement:
Bank of America - $8.6 Billion
Wells Fargo - $4.3 Billion
JPMorgan Chase - $4.2 Billion
Citigroup - $1.8 Billion
Ally Financial - $200 Million
Not Included: Fannie Mae & Freddie Mac
Michigan’s Share - $790 Million
Settlement Subject to Approval by Federal
Judge
7. Multi-State Settlement of
Foreclosure Misconduct
6% of Fund
Improperly Foreclosed on between:
1/1/08 and 12/31/11
Expected Uniform Payment: approx. $2,000
Mortgage with one of these Institutions:
Bank of America, Wells Fargo, JPMorgan
Chase, Citigroup or Ally Financial
Timetable for Recovery: Unknown
Payments to Foreclosure Victims:
8. Multi-State Settlement of
Foreclosure Misconduct
68% of Fund - Principal Reductions
Currently in Default or Risk of Default
Help People Stay in Homes, Make Reasonable Payments
Procedures Yet to be Released
3% of Fund - Homeowner Assistance Programs:
Relocation Assistance
Waiver of Deficiency Balances
Remediation of Blighted Properties
Facilitation of Short Sales
Unemployed Payment Forbearance
Relief for Struggling Homeowners:
9. Multi-State Settlement of
Foreclosure Misconduct
12% of Fund
Not Delinquent on Payments, Just “Upside-Down”
Can’t Refinance to Lower Rates – Negative Equity
Lenders Notify Borrowers of Eligibility
Eligibility Requirements:
Current on Mortgage Payments
Loan to Value Ratio in excess of 100%
Current Interest Rate: +5.25%
Must Reduce Monthly Payment by at least $100
Refinancing of Underwater Homes:
10. Multi-State Settlement of
Foreclosure Misconduct
States will not Pursue Civil Claims – Mortgage
Abuse
States and Feds May Pursue Criminal Charges
Borrowers DO NOT Release Claims
Free to Seek Additional Relief in Civil Courts
Release does not Apply to Third Party
Foreclosure Servicing Companies:
MERSCORP, Inc.
MERS, Inc.
Release of Claims:
11. Multi-State Settlement of
Foreclosure Misconduct
1% of Fund
Michigan’s Proposed Plan for its Share of the Fund
Legislature Create a Special Fund for 6 Activities:
Foreclosure Counseling for Homeowners: $20M
Foreclosure Rescue Scam Victim Restitution: $10M
MI Attorney General Home Protection Unit: $6M
Payments to Borrowers who Suffered Foreclosure: $35M
Assistance for Children Displaced by Foreclosure: $20M
Assistance for Military Service Members: $10M
Payments to the States:
