HONOLULU – In reaction to a landmark state-federal deal with the nation’s five largest mortgage servicers over foreclosure abuses and fraud during the housing crisis, the Senate Committee on Commerce and Consumer Protection along with the House Committee on Consumer Protection and Commerce will be holding an informational briefing to discuss the settlement terms and its conditions. The briefing will be held on Tuesday, February 14, 2012 at 10am in conference room 229, at the State Capitol.
Attorney General David M. Louie, this past Thursday, formally joined attorneys general in 48 other states, including the District of Columbia, in a $25 billion deal with Bank of America, JP Morgan Chase, Wells Fargo, Citigroup and Ally Financial. Oklahoma did not join the settlement and will not receive any money.
Hawaii’s estimated share of the settlement is over $71 million. Under the agreement, $8.2 million will go to the State to help address future mortgage loan servicing practices, such as counseling and mediation programs and grants. Hawaii homeowners will receive $63 million from loan term modifications and other direct relief. From the $63 million, $3.2 million will be paid directly to homeowners who were improperly foreclosed upon between January 1, 2008 and December 31, 2011. Those who suffered servicing abuse could apply and would qualify for up to $2,000 in cash payments.
The agreement forces an overhaul to mortgage servicing practices. The settlement imposes new requirements that will address robo signing abuses, document deficiencies, dual tracking, relationships with active military personnel, forced placed insurance, technology systems, loss mitigations and servicing.
“This really is a landmark settlement. Through some of the laws Congress and the Legislature have passed, and now with the vigor of the Attorneys General and our AG in particular a framework to protect the interest of Hawaii homeowners has been established. There are going to be resources coming to this State to help homeowners and not just the ones who have been wrongly foreclosed but folks into the future. I look forward to working with the Department of Commerce and Consumer Affairs and the Attorney General in tweeking Act 48, which this landmark settlement nicely dovetails, “ said Senator Rosalyn Baker, chair of the Senate Committee on Commerce and Consumer Protection. She introduced Senate Bill 651 during the 2011 legislative session, which the governor signed into law (Act 48) last May.
Act 48 aims to reform the foreclosure process by implementing additional protections for individuals facing foreclosure or who are at-risk of foreclosure. Among other things, the measure establishes a temporary mortgage foreclosure dispute resolution program and authorizes conversion from nonjudicial to judicial foreclosure.
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