Our constant drum beat for more lasting solutions for the housing crisis is working! Last Friday, the administration made two announcements critical to reviving the housing market. First, President Obama made good on his State of the Union promise, and created a new investigative working group, led by New York Attorney General Eric Schneiderman, that would take on the abuses that triggered the housing crisis. Second, the administration made significant changes to HAMP including extending the program through 2013 and providing more incentives to mortgage servicers to offer modifications with principal reduction, and extended these incentives to Fannie Mae and Freddie Mac.
With a mechanism for greater accountability now in place, the time has come for state AGs to bring their ongoing negotiations with mortgage servicers over the robo-signing scandal to a successful conclusion. This settlement is a great way to launch us into true recovery in tandem with the steps the administration is taking to continue its pursuit of justice for homeowners.
We need your help to bring the 50 state Attorneys General settlement to a close.
Here are the details of the settlement as we know them:
- The legal releases have been narrowed. This means the AGs can pursue other enforcement actions on things like predatory lending.
- $25 billion (total) robo-signing settlement with banks:
- $17 billion earmarked for principal reductions
- $5 billion for refinances
- $2–$3 billion allocated to the states for housing counseling, legal aid, and victim’s assistance (this is up to each state Attorney General to decide)
We need you to contact your state Attorney General and tell them:
- Our families can’t afford to wait – we need relief now. A strong settlement is critical to provide assistance to families that lost their homes toforeclosure due to mortgage servicers robo-signing and losing documents, pushing through foreclosures while homeowners were in the modification process, and (add other mortgage servicing abuses that caused your clients to lose their homes)
- Housing counseling has proven to be a highly effective program in helping families avoid foreclosure and getting back on track to financial security. Funding should be allocated to local housing counseling agencies to provide outreach and counseling to families, especially since federal funding for this program was cut in half.
- NUL blog on AG settlement