As part of a settlement between 49 states and five of the nation’s largest banks, some struggling Texas homeowners will receive restructured loans with lower mortgage payments. Others who already went through foreclosures may get $2,000 checks.
The $25 billion deal, agreed to by all U.S. states except Oklahoma, stems from inappropriate handling of foreclosures by Ally/GMAC, Bank of America, Citigroup, JP Morgan Chase, and Wells Fargo. Nine other institutions may become part of the agreement, pushing the national settlement total $5 billion higher.
Many mortgage lenders admitted to inappropriate activities in processing foreclosures, including failing to verify underlying documents, signing documents without reviewing them, and using fictitious names to sign documents.
The settlement prevents states from suing the mortgage lenders for these activities. However, it does not stop individual homeowners from pursuing legal remedies in civil court.
The fact that Texans will receive only about 1% of the total settlement despite the state’s large population may be a result of the low foreclosure rate in Texas … less than half the national average, according to Core Logic.
People eligible for the loan modifications or payments will receive letters over the next six to nine months. More information is available at NationalMortgageSettlement.com and from an FAQ by the Texas Attorney General’s Office.
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