In the last seven years, an average of nearly 20,000 Minnesota homeowners per year have lost their houses to foreclosure. Many more are still behind on payments and facing tough decisions.
In February 2012, the federal government and 49 states reached a settlement with five of the nation's mortgage lenders to address improper, and sometimes even illegal, foreclosure practices. The banks involved were Wells Fargo, Bank of America, Citibank, JP Morgan Chase and GMAC/Ally Financial.
Much remains to be done to implement this settlement. In the meantime, U.S. state attorneys general and federal officials are putting pressure on four large regional banks to also accept it.
One of these four banks, U.S. Bancorp, has strong ties to the Twin Cities. The others are PNC Financial Services Group, SunTrust Banks Inc. and HSBC Holdings Pic.
The effect of so many foreclosures has contributed to a steep decline in real estate prices in the Twin Cities and across the country. Despite a modest uptick in recent months, many homeowners continue to struggle. It's hard to keep making hefty housing payments when incomes are so stagnant. And it's hard to sell a house that's underwater - worth less than what the homeowner paid for it.
The settlement announced in February involving the five major lenders is supposed to include a substantial fund to compensate people who lost their houses to improper foreclosure. Many homeowners were foreclosed upon despite mishandled paperwork that often did not follow proper illegal procedures.
The settlement also sought to establish improved standards for the fair servicing of mortgages. Follow through, however, to successful implementation of the agreement.
Getting the four additional banks on board may be a positive step toward that end.
Source: "Four Regional Banks Discuss Settlement Over Foreclosures," Bloomberg, Carter Dougherty and Cheyenne Hopkins, 9-7-12
Our firm handles situations similar to those discussed in this post. To learn more about our practice, please visit our Twin Cities foreclosure defense page.