Among the misconduct cited in the Massachusetts complaint were 14 cases of foreclosures by institutions that had not shown proof that they had the legal right to seize the underlying properties when they did so.
In practice, the protection will make it harder for borrowers to sue their lenders in the case of foreclosure.
(In the case of foreclosure crimes, see for example the $335 million Bank of America discrimination settlement in 2011, the $26 billion robo-signing settlement in 2012, and the $8.5 billion settlement over wrongful foreclosures in 2013).
It doesn't involve the large-scale fraud which contributed to the 2008 financial crisis, which until now has been the subject of settlements involving the SEC, the Justice Department, and (in the case of foreclosure fraud) most of the states as well.
"The factors that brought people into the market have either disappeared, in the case of the tax credit, or their impact is lessening, in the case of foreclosures," said Jennifer H. Lee of BMO Capital Markets.
The settlement is supposed to provide relief to homeowners in the form of mortgage modifications, reduced principal, and even small cash payments in cases of wrongful foreclosure.
Let's go through the tricks that you need to be aware of in case of a foreclosure: –Equity Skimming.
For lenders, the credit lines are riskier than first mortgages, which would be paid off first in case of a foreclosure.
The lawyer for David L. Washington, the foreclosed property owner who is the plaintiff in the suit, said he hoped to convert the case into a class-action suit that would void tens of thousands of foreclosure cases handled by special process servers in recent years.
It continues to have one of the country's largest backlogs of foreclosure cases: 360,000.
