Many Ohio homeowners were wrongfully forced out of their homes in recent years because of faulty and deceptive foreclosure procedures by some of the largest lenders in this country. Some of these procedures included the failure to verify information contained in foreclosure documents and "robo-signing" practices, in which bank employees would sign documents without reading them.
These lenders have not gotten away with these tactics as U.S. state attorneys general have gone after at least five major lenders, including Bank of America, JPMorgan Chase, Wells Fargo, Citibank and Ally Financial. The hope is that by doing so, the banking industry will overhaul its foreclosure procedures with reforms that will protect homeowners from wrongly losing their homes.
A draft settlement agreement was recently reached between these banks and some of the prosecutors. According to the terms of the $25 billion draft settlement, these lenders must reform lending guidelines so that those Ohio homeowners who are at risk of losing their homes to foreclosure may be able to restructure their mortgages before being evicted. In addition, Ohio homeowners who are facing foreclosure but continue to struggle to make ends meet may possibly be eligible for a mortgage reduction.
Unfortunately for the homeowners who improperly lost their homes, they will probably not get their homes back, or even reap some of the financial benefits of this major settlement. In fact, it looks like only about half of the victims of faulty foreclosures will receive any damages, and even then they will likely only receive approximately $1,800.
Source: Pioneer Press, "Mortgage lenders agree to $25 billion settlement," Derek Kravitz, Jan. 24, 2012
