Georgia and 48 other states have entered into a $25 billion dollar settlement with five of the nation's largest mortgage service providers. The settlement is over foreclosure abuses that occurred after the housing bubble burst. Those abuses include an action known as robo-signing, where some employees of the mortgage service providers signed papers they hadn't read or used fake signatures to speed up foreclosures.
Georgia's estimated share of the settlement is more than $814 million dollars. Georgia Attorney General Sam Olens says the settlement with Bank of America, Wells Fargo, JP Morgan Chase, Citigroup, and Ally Financial is only a partial solution because other large lenders and mortgage giants Fannie Mae and Freddie Mac are not included. However, he says the state joined the agreement because of its benefit to Georgians.
“It was our opinion that there was far more for our homeowners to gain than for us to initiate separate litigation.”
Olens says portions of the settlement will benefit loan term modifications and allow some homeowners who are underwater to refinance. He also says it will allow a number who unfairly lost their homes to foreclosure to each receive between $1800 to $2000 dollars.
Another $104 million dollars will go to the state. Olens hopes it will be used to prevent foreclosures and prosecute financial fraud, but the ultimate decision will be up to the legislature.
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