In New York State, an average of 1 in 10 mortgages is at risk of foreclosure. The approximate number of individuals living in homes that are either in or facing foreclosure exceeds the populations of Buffalo, Rochester, and Syracuse combined. Earlier this year, New York, along with 48 other states and the federal government, reached a landmark $25 billion agreement to reform the abusive servicing and foreclosure practices of the nation's five largest mortgage servicing banks:
This settlement represents a first step, providing a down payment to struggling homeowners, as well as to some who have already been the victims of wrongful foreclosure.
It will provide immediate relief to homeowners across the state who are struggling. According to U.S. Department of Housing and Urban Development (HUD) estimates, New York is set to receive an estimated $548 million in the form of principal reductions, refinancing and direct payments to homeowners and former homeowners. In addition, New York will receive $130 million to pay for legal services and housing counseling to ensure New Yorkers are protected in the court system.
This agreement holds the banks accountable for their wrongdoing on robo-signing and mortgage servicing, without impeding ongoing and future investigations of the misconduct that led to the bubble and crash of the housing market. State cases against the rating agencies and bid-rigging in the municipal bond market, for example, continue. Claims and investigations against MERS and how Wall Street packaged mortgages into securities also continue.
In addition, President Obama recently announced the formation of a Residential Mortgage-Backed Securities Working Group to continue investigating the foreclosure crisis. That working group is co-chaired by Attorney General Schneiderman, along with officials from the United States Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) Director of Enforcement Robert Khuzami, and includes the IRS, the Consumer Financial Protection Bureau and other government entities. This combination of state and federal agencies gives the working group the resources it needs, as well as the broadest possible jurisdiction to continue investigating those responsible for misconduct that contributed to the economic crisis through the pooling and sale of residential mortgage-backed securities.
- About the Settlement: Learn about the settlement, who is affected and what claims may still be pursued to hold the banks accountable.
- Help for Borrowers: Learn how to find out if your loan is affected by this settlement, the timeline for relief, and how you will know if you are eligible.
- Resources: Locate information and materials to help navigate through the details of the settlement.