Knowing that you have debt hanging over you that puts you in danger of bankruptcy or foreclosure is a stressful and difficult enough process on its own for New Jersey families. This situation is made even more troubling when your home is improperly foreclosed upon for outstanding debt through faulty paperwork or other lender negligence. With so many recent incidents of improper foreclosure actions by lenders and servicing companies, the Federal Reserve says it plans to fine an additional eight banks that were not part of the massive $25 billion settlement already agreed to by the country’s five largest lenders.
As a part of that significant settlement, the five banks who were parties to the agreement committed to reducing mortgages for about one million homeowners. They also agreed to deposit settlement money into a fund that will provide $2,000 to $750,000 to homeowners who already lost their homes due to improper foreclosure practices.
Last April, the government separately demanded that 14 banks, lenders and servicers reimburse homeowners for wrongful foreclosure procedures, and some 4.3 million borrowers who were at risk of foreclosure in 2009 and 2010 were sent letters detailing the potential for reimbursement. The latest Federal Reserve fines are in addition to any previously issued by the government.
Losing a home is understandably frightening, especially when the debt causing the foreclosure seems unmanageable, and it is even worse when you know a home foreclosure was issued as a result of improper lender practices. Luckily, for those who may suspect they have are victims of these unfair actions, relief in the form of a financial reimbursement may be available. Additionally, those who are at risk of foreclosure may benefit from understanding all of the debt relief options they have at their disposal in order to avoid the devastating loss of their home.
Source: The Los Angeles Times, “Fed fines 8 banks for alleged foreclosure abuse,” March 19, 2012