By Lesley Weidenbener
Indiana's share of a
mortgage settlement between 49 states and five banks will be about $145 million
to be used primarily for homeowner loan refinancing and modifications, cash
payments for borrowers who lost homes, and consumer protection programs.
Indiana Attorney General Greg Zoeller
Attorney General Greg Zoellersaid Thursday that
the settlement offers "immediate help to many
people in Indiana and also allows an opportunity for the national housing
market to recover from the crisis of 2008, hopefully sooner rather than
recession has caused great financial hardship in the form of mortgage
foreclosures, bankruptcies and unemployment," Zoeller
said. "This resolution, while not everything we had wanted, speeds help to
Hoosiers and for the economy as a whole."
Overall, the settlement
with Ally, Bank of America, Citi, JPMorgan Chase and
Wells Fargo will provide a minimum of $26 billion in relief to distressed borrowers
and direct payments to states and the federal government. The agreement stems
from what state attorneys general have called abuses and fraud in the
foreclosure area as well as "unacceptable nationwide mortgage servicing
Zoeller joined President Barack Obama
Barack Obamaon Thursday in Washington D.C. for the announcement about the
settlement. Obama said the deal will "speed relief to the hardest-hit
homeowners, end some of the most abusive practices of the mortgage industry,
and begin to turn the page on an era of recklessness that has left so much
damage in its wake.
The agreement resulted
from a civil law enforcement investigation and initiative that includes state
attorneys general and state banking regulators across the country as well as
nearly a dozen federal agencies. State officials said loan servicers routinely
signed foreclosure-related documents outside the presence of a notary public
and without knowing whether the facts they contained were correct — an
action known as robo-signing.
The settlement provides
benefits to borrowers whose loans are owned by the settling banks as well as to
many of the borrowers whose loans they administer. Zoeller
said the settlement will result in reduced loans to
benefit homeowners who are behind on their payments and who are
"underwater" or owe more than their homes are worth.
"We will be
dedicating more resources to our homeowner protection unit and consumer
protection divisions while also providing guidance to the legislature on
programs that additional settlement funds can comply with the spirit of the
mortgage settlement," Zoeller said in a
The final agreement,
through a consent judgment, will be filed in U.S. District Court in Washington,
D.C., and will have the authority of a court order.
Some of the banks and
mortgage services plan to contact borrowers directly regarding loan
modification options. However, Zoeller urged
borrowers to contact their mortgage servicers to obtain more information about
specific loan modification programs and whether they qualify under terms of
Bank of America: (877)
Citi: (866) 272-4749
Chase: (866) 372-6901
GMAC: (800) 766-4622
Wells Fargo: (800)
Loans owned by Fannie
Mae or Freddie Mac are not affected by this
settlement. Individuals can visit www.fanniemae.com/homeaffordable
or www.freddiemac.com/avoidforeclosure to see if their loan is owned by either group.
Individuals can soon
visit the website –www.NationalForeclosureSettlement.com– to find out more information.
The Statehouse File is a news service powered by students and faculty of the Franklin College Pulliam School of Journalism.