$25 Billion Agreement: American Homeowner Relief

FEDERAL GOVERNMENT AND STATE ATTORNEYS
GENERAL REACH $25 BILLION AGREEMENT
WITH FIVE LARGEST MORTGAGE SERVICERS
TO ADDRESS MORTGAGE LOAN SERVICING
AND FORECLOSURE ABUSES

$25 billion agreement provides
homeowner relief & new protections,
stops abuses

WASHINGTON--U.S. Attorney General
Eric Holder, Department of Housing
and Urban Development (HUD)
Secretary Shaun Donovan, Iowa
Attorney General Tom Miller and
Colorado Attorney General John W. Suthers
announced today that the federal government
and 49 state attorneys general have reached
a landmark $25 billion agreement with the
nation's five largest mortgage servicers
to address mortgage loan servicing and
foreclosure abuses.
The agreement provides substantial financial
relief to homeowners and establishes significant
new homeowner protections for the future.

The unprecedented joint agreement is the largest
federal-state civil settlement ever obtained and
is the result of extensive investigations by
federal agencies, including the Department of
Justice, HUD and the HUD Office of the Inspector
General (HUD-OIG), and state attorneys general
and state banking regulators across the country.
The joint federal-state group entered into the
agreement with the nation's five largest mortgage
servicers: Bank of America Corporation,
JPMorgan Chase & Co., Wells Fargo & Company,
Citigroup Inc., and Ally Financial Inc. (formerly GMAC).

"This agreement--the largest joint federal-state
settlement ever obtained--is the result of
unprecedented coordination among enforcement
agencies throughout the government," said
Attorney General Holder." It holds mortgage servicers
accountable for abusive practices and requires them
to commit more than $20 billion towards financial
relief for consumers.

As a result, struggling homeowners throughout the
country will benefit from reduced principals and
refinancing of their loans. The agreement also requires
substantial changes in how servicers do business,
which will ensure the abuses of the past are
not repeated."

"This historic settlement will provide immediate
relief to homeowners, forcing banks to reduce the
principal balance on many loans, refinance loans for
underwater borrowers, and pay billions of dollars to
states and consumers," said HUD Secretary Donovan.
"Banks must follow the laws. Any bank that hasn't
done so should be held accountable and should take
prompt action to correct its mistakes. And it will
not end with this settlement.

One of the most important ways this settlement helps
homeowners is that it forces the banks to clean up
their acts and fix the problems uncovered during our
investigations. And it does that by committing them
to major reforms in how they service mortgage loans.

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