Website for Mortgage Settlement

For more information on the settlement between the banks and states attorneys general is here:

http://nationalmortgagesettlement.com/

The settlement will provide as much as $25 billion in relief to distressed borrowers and direct payments to states and the federal government. It’s the largest multistate settlement since the Tobacco Settlement in 1998.

The agreement settles state and federal investigations finding that the country’s five largest loan servicers routinely signed foreclosure related documents outside the presence of a notary public and without really knowing whether the facts they contained were correct.  Both of these practices violate the law.  The settlement provides benefits to borrowers whose loans are owned by the settling banks as well as to many of the borrowers whose loans they service.

Bank of America to Reduce Principals

As part of the foreclosure settlement, Bank of America will be offering principal reductions on mortgages originated by Countrywide.  NY Times:

The cuts for homeowners who owe more than their homes are worth could total more than $100,000 each under the deal with the government, according to Dan Frahm, a spokesman for Bank of America. Bank of America hopes it will be able to reduce what it owes in penalties under the settlement by up to $850 million.