A $10 billion settlement with more than a dozen major banks over foreclosure abuses is expected to be announced by regulators today, according to reports by several media outlets.
According to the reports, the settlement focuses on streamlining the review of foreclosures in 2009 and 2010 that were the target of a landmark settlement announced last February.
Last year’s settlement, involving 49 state attorneys general including Connecticut’s, was over shoddy foreclosure practices. The practices included signing off on foreclosures without verifying facts and systemic problems in making loan modifications.
The New York Times reports:
It is still unclear how the cash relief will be distributed among homeowners, but one immediate result of the settlement is the end of a troubled review of millions of loan files. As part of a consent order in April 2011, the comptroller’s office and the Federal Reserve mandated that banks hire independent consultants to comb through more than 4 million loan files to spot illegal fees, bungled loan modifications, and instances where borrowers lost their homes even though they were current on their payments. Only 323,000 homeowners submitted files to be reviewed.
Within the comptroller’s office, senior officials raised concerns that the reviews had grown bloated and inefficient, especially after each loan took more than 20 hours to review, up from original estimates of just eight hours per file.
Read more of the Times’ report here.