Updating a story we brought you last week, the Associated Press is reporting that ten major banks have agreed to pay $8.5 billion to settle federal complaints that they wrongfully foreclosed on homeowners who should have been allowed to stay in their homes.
The Office of the Comptroller of the Currency and the Federal Reserve announced the settlement jointly last week.
The banks, which include JPMorgan Chase, Bank of America and Wells Fargo, will pay billions to end a review process of foreclosure files that was required under a 2011 enforcement action, according to the AP.
The banks were required by regulators in April 2011 to conduct reviews of foreclosures and to compensate consumers in cases where consumers could demonstrate an error. Reviews of some individual borrower files were taking as long as 25 to 30 hours rather than the eight to 10 hours initially expected, according to the AP.
Some consumer protection advocates are upset with the settlement, saying that the banks are responsible for damages that have cost homeowners more money.
“This was supposed to be about compensating homeowners for the harm they suffered,” Diane Thompson, a lawyer with the National Consumer Law Center told the AP.
If you are facing foreclosure, an attorney can provide you with the best advice about when to file for bankruptcy based on your current income and the urgency of your situation. Chapter 13 or Chapter 7 bankruptcies stop the foreclosure process, as they generate automatic stays that prevent creditors from taking action against you to collect debts.
If you are struggling to pay your mortgage and are in fear of foreclosing on your home, contact our Washington DC and Maryland bankruptcy lawyer now for a free consultation.