SALT LAKE CITY (ABC 4 News) - Federal and state officials announce a 25 billion dollar settlement with the nation's five largest banks over foreclosure abuses and fraud. The State of Utah is going to see 171 million dollars of that settlement, unfortunately for those who have already lost their home to foreclosure they won't see much of a payout.
Here's how the numbers break down. Of the $171 million, $45 million is going to direct payments to foreclosure victims. That could average out to only about 2-thousand dollars per household. Another $102 million is going towards indirect relief. It’s what's called soft money that won't be paid out to the state rather the banks will use it to bring down principle balances, forgive penalties and help with refinancing. The remaining $23 million is going directly to the state. It’s still up to the legislature to decide how to spend it. One suggestion that has already been presented to lawmakers includes the creation of some kind of mortgage fraud investigation office.
This agreement doesn’t mean the banks are in the clear. The state of Utah still has criminal cases pending and foreclosure victims themselves can also file civil cases against their lender for fraud under this agreement.
Governor Gary Herbert said, "This is a good start. It's not the end. There's still some work to do."
Utah Attorney General Mark Shurtleff said, “Some will complain that a 25 billion dollar hit isn't big enough, that they want to see some bank executives in prison. It's important for us to understand that this doesn't inhibit any ongoing or further investigation or prosecution."
It will likely be another 60 to 90 days before hurting homeowners can start asking their banks for help under this agreement.
Bank of America will be in two locations in Utah this week Friday, February 10 – Saturday, February 11 at the Grand America Hotel in Salt Lake City and the Eccles Conference Center in Ogden. Customers who are currently struggling with their mortgage can sit down face-to-face with a home loan specialist and discuss their current situation.
For more information on the proposed settlement you can log on to www.NationalForeclosureSettlement.com, www.HUD.gov, www.DOJ.gov or call the following banks: Bank of America: 1-877-488-7814, Citi: 1-866-272-4749, Chase: 1-866-372-6901, GMAC: 1-800-766-4622, Wells Fargo: 1-800-288-3212
