Wednesday, December 26, 2012

The settlement callback that never came

Remember when the the U.S. Department of Justice and State Attorneys General announced the $25 billion settlement with 5 of the largest mortgage servicers? That happened way back in February of 2012 and it included Bank of America.  It was meant to address their history of mortgage loan servicing and foreclosure abuses.

Here are a few of the items and ideas that were announced at that time in a DOJ press release. I agree that the settlement is not strong enough but there are elements of it that appear helpful (in theory at least). I have emphasized specific things that may have been helpful in my own situation:

  • Reduced principals
  • Refinancing loans for underwater borrowers
  • Substantial changes in how servicers do business
  • "homeowners will be protected and treated fairly"
  • Stop using deceptive practices in offering loan modifications
  • Other forms of relief including forbearance of principal for unemployed borrowers
  • Restricted from foreclosing on a borrower that is being considered for a loan modification

Only a handful of days after I heard the news about this settlement I inquired with Bank of America by phone.  The representative took my name and information and claimed that they were putting me in some sort of queue and that someone would respond in some way and some point in the future.  After months of not getting an answer on what settlement related programs I might benefit from, I inquired by phone again.  I was told that they were very busy processing similar requests and that I would get an answer of some kind at some point in the future.

I'm still waiting and my situation continues to get more perilous.  Perhaps that is the entire point behind Bank of America's delay.

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