In late July, the Federal Reserve Board reached a foreclosure settlement with GMAC Mortgage, according to a Federal Reserve press release. According to DSNews.com, the settlement will put an end to the “complex and costly foreclosure reviews required through prior enforcement settlements.” What does this mean for homeowners? In short, it means more settlement checks to homeowners. Under the terms of the agreement, GMAC will be paying about $230 million in cash payments to home loan borrowers.
Borrowers in Illinois who used GMAC as a mortgage servicer may be eligible for compensation under the guidelines of the recent settlement. Did your home go into foreclosure? Do you suspect that your mortgage servicer used fraudulent practices when dealing with your mortgage terms and instituting foreclosure? If you have questions about avoiding foreclosure or how to seek compensation from a foreclosure settlement, an experienced foreclosure defense lawyer can discuss your claim with you today.
Previous Foreclosure Settlements
GMAC is one of 13 mortgage servicers that have reached settlement agreements with the Federal Reserve Board and the Office of the Comptroller of the Currency (OCC). According to the Federal Reserve Board, more than 232,000 borrowers who used GMAC as their loan servicer were in various stages of foreclosure in 2009 and 2010. It’s those homeowners who are going to receive payment relief as compensation.
According to a government press release, the OCC and Federal Reserve previously entered into amendments with Aurora, Bank of America, Citibank, Goldman Sachs, HSBC, JPMorgan Chase, MetLife Bank, Morgan Stanley, PNC, Sovereign, SunTrust, U.S. Bank, and Wells Fargo. Now with GMAC Mortgage added to the list, we’ll see an increase in the total amount paid in compensation to borrowers who were harmed by these servicers’ mortgage practices. In fact, about 4.4 million borrowers in total will receive more than $3.8 billion in monetary compensation, while another $5.8 billion from these settlements will be dedicated to “loss-mitigation assistance, such as loan modifications and forgiveness of deficiency judgments.”
What did GMAC Mortgage Do Wrong?
Compensation for what, you might ask? Why the settlement? Like the other servicers mentioned above, GMAC had been subject to an enforcement action for “deficient practices in mortgage loan servicing and foreclosure processing.” In short, GMAC didn’t follow the rules when it came to dealing with mortgage borrowers whose homes went into foreclosure. A report on the settlement in Business Week described GMAC’s practices as “faulty foreclosures.” In fact, allegations include that GMAC “improperly seized homes” under the guise of foreclosure laws and regulations.
Borrowers who have been affected by GMAC’s bad practices and are entitled to a settlement check won’t have to sign a waiver of any legal claims against GMAC in order to accept the relief payment.
A bankruptcy court has been overseeing the proceedings for GMAC Mortgage, and that court approved its entry into the amended enforcement action, according to a press release from the Federal Reserve Board. The Federal Reserve has indicated that its examiners “continue to closely monitor” GMAC’s work to implement the plan, as well as that of other servicers, to “correct the unsafe and unsound mortgage servicing and foreclosure practices.”
Do you have questions about the settlement or concerns about foreclosure in Illinois? An experienced foreclosure defense attorney can answer your questions. Don’t hesitate to contact us.
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