For Immediate Release
February 9, 2012
James T. Boffetti, Senior Assistant Attorney General
Attorney General Michael A. Delaney and Banking Commissioner Ronald A. Wilbur announce that New Hampshire has formally joined a landmark $25 billion national joint federal-state agreement with the nation's five largest mortgage servicers over foreclosure abuses and fraud, and unacceptable nationwide mortgage servicing practices.
The proposed agreement provides an estimated $43.6 million in direct relief to New Hampshire homeowners and addresses future mortgage loan servicing practices. U.S. Attorney General Eric Holder, U.S. Housing and Urban Development (HUD) Secretary Shaun Donovan and a bipartisan group of state attorneys general announced the settlement in Washington, D.C.
"This agreement is very significant in how it addresses the fraud that these banks committed against many homeowners across our state," said Attorney General Delaney. "This agreement not only provides much needed relief to New Hampshire borrowers, but it also puts a stop to many of the bad behaviors that contributed to the mortgage mess in our state and across the country."
The state's estimated share of the settlement is $43.6 million.
The unprecedented joint state-federal settlement is the result of a massive civil law enforcement investigation and initiative that includes state attorneys general and state banking regulators across the country, and nearly a dozen federal agencies. The settlement holds banks accountable for past fraud and abuses and provides relief to homeowners. With the backing of a federal court order and the oversight of an independent monitor, the settlement stops future fraud and abuse.
Under the agreement, the five servicers have agreed to a $25 billion penalty under a joint state-national settlement structure.
The settlement does not grant any immunity from criminal offenses and will not affect criminal prosecutions. The agreement does not prevent homeowners or investors from pursuing individual, institutional or class action civil cases against the five servicers. The pact also enables state attorneys general and federal agencies to investigate and pursue other aspects of the mortgage crisis, including securities cases.
On January 27 U.S. Attorney General Eric Holder along with Housing and Urban Development (HUD) Secretary Shaun Donovan, Securities and Exchange Commission (SEC) Director of Enforcement Robert Khuzami and New York Attorney General Eric Schneiderman announced the formation of the Residential Mortgage-Backed Securities Working Group. The working group will investigate those responsible for misconduct contributing to the financial crisis through the pooling and sale of residential mortgage-backed securities.
"This agreement addresses breakdowns in the mortgage servicing industry, and allow us to pursue other mortgage-related misconduct," said Attorney General Delaney.
Commissioner Wilbur stated, "I commend the attorneys general for their considerable efforts in reaching a settlement which provides meaningful relief right now, while ensuring a reform of industry practices going forward."
Scope of Settlement
This enforcement action targets one segment of the nation's vast and complex mortgage market, though the new servicing standards will apply to all mortgage loans serviced by the settling banks.
"While this settlement includes significant relief for homeowners, it also puts in place new protections for homeowners in the form of mortgage servicing standards," Attorney General Delaney said. "That's not something we'd see if we simply won a money judgment in a trial."
The final agreement, through a consent judgment, will be filed later in U.S. District Court in Washington, D.C., and will have the authority of a court order.
Because of the complexity of the mortgage market and this agreement, which will span a three year period, borrowers in some cases may be contacted directly by one of the five included mortgage servicers regarding loan modification offers, may be contacted by a settlement administrator or their state attorney general, or may need to contact their mortgage servicer to obtain more information about specific programs and whether their loan qualifies. More information will be made available as the settlement programs are implemented.
For more information on the proposed agreement:
Bank of America: 1-877-488-7814
Wells Fargo: 1-800-288-3212
New Hampshire Department of Justice | 33 Capitol Street | Concord, NH | 03301