Settlement Deal Could Mean that Banks Will Pay $8.5 Billion to Wrongfully Foreclosed on Homeowners; More than 10,000 people in Franklin County are Eligible for Payments and Loan Modifications
Brown is Joined by Central Ohio Homeowner Who Would Likely be Eligible for an Average of $2,125 Under the Agreement Announced Last Week
In Wake of Settlement Deal, Brown Calls for Reforms to Mortgage Servicing to Prevent Foreclosures and Help Heal the Ohio Housing Market
COLUMBUS, OH – Today, U.S. Sen. Sherrod Brown (D-OH) revealed how Ohioans will be affected by this month’s deal requiring banks to pay $8.5 billion to homeowners who were hurt by the mortgage crisis. Brown was joined at Homeport by a central Ohio teacher, Jeanne Brigner, a homeowner whose bank initiated foreclosure proceedings despite her being up-to-date on mortgage payments. With the help of Brown’s office, Ms. Brigner is still in her home. Brown outlined legislation that would help the housing market and economic recovery by preventing foreclosures and keeping more Americans in their homes.
“After three years of legal battles over robo-signing, wrongful foreclosures, and excessive fees, this settlement will bring relief to thousands of central Ohioans,” Brown said. “But we must do more to get our economy and housing market back on track. That means keeping Ohioans in their homes and preventing foreclosures that are devastating to families, communities, and surrounding property values. That’s why I’m urging federal regulators to end a system where banks foreclose first and ask questions later so that this kind of mortgage crisis will never undermine our economy again.”
Foreclosures – which drag down housing prices and hurt borrowers, even those that act responsibly—have been responsible for the slow housing market recovery. Last week, federal regulators and 10 lenders reached an agreement to address the large number of unlawful foreclosures that occurred when banks used illegal practices—such as “robo-signing”—to initiate foreclosure proceedings or failed to offer mortgage modifications or other measures that could keep Americans in their homes. Nearly 95,000 Ohioans, including more than 10,000 people in Franklin County, are eligible for payments and loan modifications averaging $2,125 per homeowner under the deal.
Brown sent a letter today to the Office of the Comptroller of the Currency (OCC) and the Federal Reserve calling on the regulators to ensure that adequate relief is provided to all homeowners who suffered abuses in the foreclosure process, particularly low-income and minority homeowners who may not have filed a claim in the initial Internal Foreclosure Review (IFR) process. Brown also asked the OCC and Federal Reserve to continue their work to address abuses in the foreclosure process.
“We are grateful for Senator Brown’s focus on changing the system so that future mortgagors are not victims of fraud,” said Amy Klaben, CEO of Homeport who also attended today’s event. “We believe that requiring homebuyer education, such as the program provided by Homeport, at the outset of the home buying process is an important key to prevention. For those home owners who are in default on their mortgages, we encourage them to seek counseling early. We are committed to helping residents become, and remain, successful home owners.”