Ten major banks and mortgage companies, including Bank of American and Wells Fargo, were ordered to pay an $8.5 billion settlement to rectify shoddy loans and wrongful foreclosures for unsuspecting customers.
The money will go to up to 3.8 million homeowners that were wrongfully kicked out of their house between 2009 and 2012. The decision comes from a review process of foreclosure files that revealed that the bank mishandled paperwork and skipped required steps in the foreclosure process.
Homeowners could see individual settlements from $1,000 to $125,000 depending on the offense; Failing to offer someone a loan modification would be considered a lighter offense; unfairly seizing and selling a person’s home would entitle that person to the biggest payment, according to guidelines released last summer by the Office of the Comptroller of the Currency.
Other companies and banks that are involved in the sham include JP Morgan Chase, MetLife Bank, PNC Financial Services, HSBC Finance Corp., Suntrust and Citigroup.
While this may seem like a win for homeowners who were dealt a bad hand, others seem to think the punishment is not harsh enough.
“It’s another get out of jail free card for the banks,” said Diane Thompson, a lawyer with the National Consumer Law Center. “It caps their liability at a total number that’s less than they thought they were going to pay going in.”
Either they’re too big to fail or too broke to pay up. Or just plain shady. Here we go again.
SOURCE: Associated Press
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