Last week, Goldman Sachs and Morgan Stanley agreed to a $557 million settlement with federal regulators over their mortgage lending and foreclosure practices, building on an earlier $8.5 billion deal with 10 other banks.
Last week, we reported the $8.5 billion agreement with Bank of America, JPMorgan Chase, Wells Fargo and seven other lenders. The banks were required by regulators in April 2011 to conduct reviews of foreclosures and to compensate consumers who could demonstrate an error, according to the New York Times.
Reviews of some individual borrower files took as long as 25 to 30 hours rather than the eight to 10 hours initially expected.
As part of the deal with the Federal Reserve, Goldman Sachs and Morgan Stanley will pay $232 million to borrowers, along with $325 million to help troubled homeowners with loan modifications.
Around 220,000 borrowers will receive cash payments because of the settlement, according to the Times.
Struggling homeowners should be aware that a Chapter 13 bankruptcy stops the foreclosure process, as it generates an automatic stay that prevents creditors from taking action against you to collect debts.
Chapter 13 bankruptcy allows you catch up on your past due mortgage payments while continuing to make your ongoing mortgage payments, allowing you to save your home.
If a foreclosure is imminent, an attorney will be able to provide you with the best advice about when to file for bankruptcy based on your income and the urgency of the situation.
If you fear that you are going to lose your home, contact our Washington DC and Maryland bankruptcy lawyer now for a free consultation.