Area victims of the mortgage crisis may see some relief as a result of a multibillion dollar settlement -- that's the word from attorneys general in Maryland, Virginia and D.C.
Maryland Attorney General Douglas Gansler calls the settlement a big win for Maryland homeowners, and for borrowers across the country.
"People who are foreclosed upon by these banks will receive money," says Gansler. "People who are on the brink of being foreclosed upon will get principal reduction."
The country's five largest loan servicers -- Bank of America, J.P. Morgan Chase, Wells Fargo, Citigroup and Ally Financial -- have agreed to pay about $25 billion in relief and payments. Local leaders say that amounts to about $40 million for the District, $960 million for Maryland, and about $480 million for Virginia.
"It is an unprecedented arrangement," notes Virginia Attorney General Ken Cucinelli. " It is the largest settlement since the Tobacco settlement in the 1990s."
Cuccinelli says homeowners who were foreclosed upon by those banks from 2008 to 2011 are likely to receive between $1,800 and $2,000 each over the next three years. He says the settlement does not prevent individuals from filing additional claims.
"I want to make clear that every Virginia citizen who believes he or she was wrongfully foreclosed upon remains free to pursue action against the bank," says Cuccinelli.
According to state and federal investigations, the five loan servicers routinely violated the law by signing foreclosure paperwork outside the presence of a notary public and without verifying facts. As a result, the settlement includes a slew of new industry standards and additional protections for homeowners.
Area residents who believe they may be eligible are urged to explore the option for their state. Contact information for Virginia, Maryland and D.C. can be found on the Kojo Show website.