TRENTON – The state Attorney General announced today that New Jersey has joined a $25 billion multistate settlement over foreclosure abuses, fraud and unacceptable business practices by the country’s five largest mortgage servicers.
The proposed settlement provides an estimated $762 million in direct relief to New Jersey homeowners and reforms mortgage loan servicing practices, according to N.J. Attorney General Jeff Chiesa.
Federal officials and a group of state attorneys general announced the national settlement today in Washington, D.C. The five settling mortgage servicers are Ally Financial, Bank of America, Citi, JP Morgan Chase and Wells Fargo.
“This settlement is important because it will bring much-needed relief to New Jersey borrowers, and significant reform to the mortgage servicing industry,” 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,” said Commissioner of Banking and Insurance Tom Considine. “It is also a key step for mortgage servicers as improved performance helps them turn the corner toward a healthier marketplace.”
Among other things:
New Jersey borrowers will receive an estimated $660 million in benefits from loan term modifications and other direct relief.
New Jersey borrowers who lost their home to foreclosure between January 1, 2008 and December 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 housing programs.