Nearly six months ago, the nation’s five largest loan providers — Ally/GMAC, Bank of America, Citi, JPMorgan Chase and Wells Fargo — agreed to the $25 billion National Mortgage Settlement in response to the ongoing foreclosure crisis.
The terms of the settlement just went into full effect.
Thanks to California Attorney General Kamala Harris, almost half the settlement — $12 billion — was set aside for our state.
Now there’s monetary compensation to help certain foreclosure victims and new loan servicing standards for people getting the runaround from banks. Even certain loans owned or backed by Fannie Mae or Freddie Mac will benefit from the new servicing standards.
To see if you qualify for relief and to get instructions on how to submit a claim, visit www.oag.ca.gov/
We all know what a devastating toll the mortgage crisis has taken. Earlier this year, my office released a report showing California’s foreclosure process was “utterly broken.”
The findings of the report, “Foreclosure in CA: A Crisis of Compliance,” revealed that nearly 85 percent of all foreclosure cases we reviewed had at least one clear violation of the law.
After our report came out, California adopted the Homeowner Bill of Rights, a package of consumer protection laws the state Legislature had been working on for months.
The Homeowner Bill of Rights becomes state law on Jan. 1. It not only cements the National Mortgage Settlement into our civil code, but it also makes terms of the settlement apply to all banks.
Furthermore, the new law provides additional consumer protections. For instance, borrowers will now be able to sue a provider for wrongdoing before a foreclosure is completed.
During the next 100 days before the Homeowner Bill of Rights goes into effect, we must carefully watch how the mortgage industry adheres to the National Mortgage Settlement. California must be prepared to address any shortcomings in bank compliance.
Millions of homeowners in California and across the country have been harmed by foreclosures. Reckless and predatory mortgage practices plunged our economy into the Great Recession.
Now, concrete relief is finally available to the public. We must ensure that banks fulfill their obligations and the public benefits from both the funds now available and the mandatory improvements to mortgage-servicing practices.
Phil Ting is the assessor-recorder of San Francisco.