The Office of the Attorney General of Massachusetts announced a settlement agreement with four national banks about claims of unlawful foreclosures on homeowners in the state. The four banks are Bank of America, CitiGroup, JPMorgan Chase, and Wells Fargo:
"The consent judgment, entered today in Suffolk Superior Court, resolves the AG's allegations that Bank of America, JP Morgan Chase Bank, Citi, and Wells Fargo Bank violated Massachusetts foreclosure law and the Massachusetts Consumer Protection Act by illegally foreclosing upon Massachusetts residents’ homes when the banks lacked the legal authority to do so."
The events that led up to this announcement:
"The Supreme Judicial Court ruled in the Ibanez decision that mortgagees seeking to foreclose must strictly comply with Massachusetts foreclosure laws. Under the statutory power of sale and Massachusetts law, a foreclosure is void unless a bank or other foreclosing party is the mortgagee of record or holds the mortgage through a valid assignment before publishing the notice of foreclosure sale... The banks’ failure to obtain a valid assignment of the mortgage prior to foreclosure has adversely impacted titles to numerous properties in the Commonwealth."
The AG's office is still pursuing a judgment against defendant GMAC Mortgage, LLC, which filed bankruptcy in May 2012. Experts have said that the illegal foreclosure problem is widespread across the United States. A 2012 settlement agreement included $25 billion paid by five banks: Ally Financial, Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo. That 2012 settlement, between federal officials and 49 states (what's up Oklahoma?), included mortgage abuses such as robo-signing and incomplete/inaccurate record keeping. A 2013 analysis found that banks illegally foreclosed on more than 700 military personnel. And, in February 2014:
"... Ocwen, the nation’s fourth largest mortgage servicer, entered into a $2.1 billion national settlement with the federal government, and 49 states, including Massachusetts, resulting in an estimated $80 million in principal reduction and cash payments to Massachusetts homeowners over claims of loan servicing misconduct and so-called “robo-signing.” Massachusetts homeowners also received approximately $1.5 million in cash payments from that multistate settlement..."
Terms of the latest consent judgment:
"... the banks are obligated to assist a consumer who makes a claim that the title to his or her residence is void from an unlawful foreclosure by conducting a thorough title review, providing curative documents, releasing junior liens held by the banks, and, in cases where consumers do not have title insurance, paying reasonable costs associated with the title cure. In addition, the banks will pay $2.7 million, $700,000 of which will be allocated to the Attorney General’s Local Consumer Aid Fund to provide consumer assistance. The remaining $2 million of the settlement will be paid to the Commonwealth's General Fund."
While settlements and consent judgments are nice, this wrongdoing will stop only when bank executives go to prison.