An on-going story regarding foreclosures in Georgia and nationwide is that certain lenders have been found to have taken short cuts using unverified documents and flawed procedures in rushing to foreclosures. As a result, phrases such as robo-signing and "back-dated documents" have become part of the vocabulary in the media and in court decisions. When lenders cut corners in the foreclosure process, affected homeowners are denied the procedural due process of law to which they are entitled before a lender can be allowed to sell their home on the courthouse steps.
The U.S. Justice Dept. and the various state Attorneys General have brought lawsuits against lenders found to be using illegal short-cuts to foreclosure. Georgia as well as 48 other states has negotiated a $25 billion settlement with major lenders who have agreed to reduce mortgage loans and reimburse homeowners who were victims of illegal foreclosure tactics. The lenders involved in the settlement include Wells Fargo, Bank of America, JPMorgan Chase, Citigroup and Ally Financial. The Atlanta Journal-Constitution reports that the state of Georgia's share exceeds $814 million.
Problems with the foreclosure settlement
It appears that the lender settlement applies to only 7% of loans nationwide. As a result, the settlement has come under heavy fire for not doing enough. It appears that the settlement only applies to loans entered into from 2008 through 2011 with the five lenders, but does not include any mortgages owned by the mortgage giants Fannie Mae and Freddie Mac which were also instrumental in the mortgage "Meltdown".
With negative equity in households estimated at $700 billion after the meltdown, is there any surprise to find naysayers to the settlement?