New Jerseyans affected by mortgage, foreclosure abuses to share 2M | Economy | -- Your State. Your News.

Jun 02nd
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New Jerseyans affected by mortgage, foreclosure abuses to share $762M

forecloselogo033011_optSettlement to also provide $75.5 million for state housing programs


New Jersey is part of a landmark $25 billion joint state-federal settlement that resolves a national investigation into alleged foreclosure abuses, fraud and unacceptable business practices by the country’s five largest mortgage servicers and provides an estimated $762 million in direct relief to New Jersey homeowners.

U.S. Attorney General Eric Holder, U.S. Housing and Urban Development Secretary Shaun Donovan and a bipartisan group of state attorneys general announced the national settlement Thursday in Washington.

The five settling mortgage servicers are Ally Financial, Bank of America, Citi, JP Morgan Chase and Wells Fargo.

Under the terms of the settlement, New Jersey and its citizens will benefit in several ways:

  • New Jersey borrowers will receive an estimated $660 million in benefits from loan term modifications and other direct relief.
  • Borrowers who lost their home to foreclosure between Jan. 1, 2008 and Dec. 31, 2011, and suffered servicing abuse, will qualify for $12.5 million in cash payments.
  • The value of refinanced loans to New Jersey borrowers who owe more on their mortgages than their homes are worth will be an estimated $89.5 million.
  • The state will also receive a direct payment of $75.5 million, which will help pay for various state-run housing programs.

“This settlement is important because it will bring much-needed relief to New Jersey borrowers, and significant reform to the mortgage servicing industry,” state Attorney General Jeffrey S. Chiesa said. “Through the changes required by this settlement, we are putting a stop to the conduct that has harmed borrowers in the past and contributed to the mortgage problems in our state and across the country.”

“Today’s announcement about the multi-state mortgage servicing settlement is a step forward for consumers as they work hard to recover from the last recession,” state Banking and Insurance Commissioner Tom Considine said. “It is also a key step for mortgage servicers as improved performance helps them turn the corner toward a healthier marketplace.”

The 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 state Division of Law’s Affirmative Civil Enforcement Group and the Division of Consumer Affairs conducted a joint investigation reviewing consumer complaints, court filings and other documents. The attorney general’s office also conducted interviews with borrowers affected by the servicers’ conduct. The problems identified during New Jersey’s investigation mirrored those encountered in other states.


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