Delaware is expected to get a $45 million share of a $25 billion national mortgage foreclosure settlement, which has been approved by a federal judge.
Attorney General Beau Biden says the agreement requires the five largest mortgage-servicing banks to “put meaningful customer-service standards into practice without affecting the additional actions we and other states are taking to hold banks accountable for their conduct that led to the housing crisis.”
An investigation began in October 2010 into allegations that bank practices were leading to premature and unauthorized foreclosures, violations of homeowners’ rights and protections, and “robo-signing” of foreclosure documents.
New protections and customer-service standards are also in place for military veterans. The institutions affected are Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial (formerly GMAC.)
According Biden, more than $32 million that would be sent to Delaware would be made available for current and former homeowners to reduce their principal mortgage loans and help those who are “under water” – burdened with mortgages that are larger than their homes are worth. About $10 million would fund homeowner assistance programs, a new mortgage mediation program, investigative activities and educational outreach.
The settlement which was reached in February involved Delaware, 48 other states and the District of Columbia as well as the five banks.
Biden’s office is also involved in other mortgage-related actions, including a lawsuit filed against MERS, the private mortgage registry that was accused of generating confusion among homeowners, investors and other stakeholders in the mortgage finance system.