Non-Monetary Assistance Available for Residents Seeking to Refinance or Sell Property after Unlawful Foreclosures
BOSTON – March 31, 2015 – (RealEstateRama) — Following a $2.7 million settlement with four national banks resolving allegations of unlawfully foreclosing on properties in Massachusetts, Attorney General Maura Healey’s Office has launched a webpage to assist eligible homeowners in clearing property titles so they can refinance or sell their properties.
“Through this settlement we are empowering residents who may have been unable to refinance their mortgage loans or sell their properties because of these unlawful foreclosures,” AG Healey said. “This website enables consumers to file online complaints and have their title issues reviewed by the banks in a single process.”
The consent judgment, entered in January in Suffolk Superior Court, resolved the AG’s allegations that Bank of America, JP Morgan Chase, Citi and Wells Fargo, all violated state laws by unlawfully foreclosing on homes when the banks did not own the mortgage and therefore lacked the legal authority to foreclose.
It was alleged that the unlawful conduct resulted in void foreclosures affecting thousands of titles throughout the Commonwealth. Under Massachusetts law, a foreclosure is void unless a bank or other foreclosing party is the mortgage holder of record or holds the mortgage through a valid assignment before publishing the notice of foreclosure sale.
The banks have agreed to provide non-monetary assistance to help resolve title defects resulting from improper foreclosures they conducted after Dec. 1, 2007. Each bank will review the complaints and their records to determine if a title defect resulted from a void foreclosure. If so, the bank will, among other relief, provide the documents to facilitate clearing the title defect so that consumers may refinance or sell their properties. The new webpage can be found athttp://www.mass.gov/ago/voidforeclosures.
Under the terms of the settlement, the banks also agreed to pay $2.7 million, $700,000 of which has been allocated to the Attorney General’s Local Consumer Aid Fund to provide consumer assistance. The remaining $2 million of the settlement has been paid to the Commonwealth’s General Fund.
The amended complaint alleged that the banks ignored this fundamental legal mandate and foreclosed on homeowners when they did not hold the mortgage and had no legal authority to conduct the foreclosures. The AG’s Office continues to negotiate a resolution of these claims with GMAC Mortgage, LLC, one of the named defendants, which filed bankruptcy in May 2012.
The complaint initially contained allegations against the banks relating to widespread mortgage servicing abuses and allegations against Mortgage Electronic Registration System, Inc. (MERS) and the banks for violation of Massachusetts law relating to registered land. The allegations relating to registered land were dismissed in November 2012, while the servicing allegations against the banks were resolved in the National Mortgage Settlement, a landmark agreement announced in February 2012.
So far, the National Mortgage Settlement has provided more than $63 billion in relief to distressed homeowners nationwide, and created significant new servicing standards which the banks must follow. The National Mortgage Settlement brought more than $300 million in relief to Massachusetts borrowers, including a direct payment of more than $44.5 million to the Commonwealth, used in part to establish the AG’s HomeCorps program and offer grants aimed at helping to mitigate the impact of the foreclosure crisis.
Homeowners with questions can contact the Attorney General’s Office at (617)-727-8400.