Over the next three months, New York homeowners facing foreclosure will learn if they are covered by a sweeping settlement with five major banks announced on Feb. 9.
State Attorney General Eric Schneiderman, who had been pursuing payments from banks for alleged misconduct since taking office in 2011, announced on Feb. 9 that the state would receive $136 million as part of a $26 billion settlement with Bank of America, Citi, Chase, GMAC and Wells Fargo.
In January Schneiderman was appointed by President Obama to head up the national Residential Mortgage-Backed Securities Working Group, which has been charged to work with the Department of Justice and the states to investigate misconduct that may have contributed to the collapse of the housing market.
Schneiderman, in a press release issued by his office, said some of the money will go toward housing advocacy and legal aid groups who work with those facing foreclosure.
Federal housing officials are saying that up to $13 million also could be available for direct payments to those who were victims of wrongful foreclosure.
Schneiderman’s office did not return numerous calls seeking more detailed information on who would be eligible for direct payments, or if the working group would broaden its investigation to include such federally-supported agencies as Fannie May or Freddie Mac.
Both have received billions in government bailouts and have former executives under investigation by the Securities and Exchange Commission.
Schneiderman’s office said the national settlement will bring other types of relief for beleaguered homeowners who are eligible.
Citing preliminary estimates by the U.S. Department of Housing and Urban Development, the Attorney General’s Office said banks have agreed to grant up to $140 million through loan refinancing options* and another $495 million through other loan modifications.
Schneiderman said that more importantly, the settlement preserves the future rights of the state and federal governments to pursue criminal and civil claims for damages inflicted through misconduct.
Further details are available on Schneiderman’s website at ag.ny.gov.