Robo-Signing Settlement is Historic: Not Without Controversy

Robo-Signing Settlement is Historic: Not Without Controversy

On the historic date of February 9th, the United States Justice Department released the details of a $25 billion dollar settlement they reached with 5 major banks. “The settlement occurred because the banks were accused of widespread use of “Robo-signing,” said Donna Tashjian, CDPE with Keller Williams.

Robo-signing is a practice employed by banks to automate the processing and approval of foreclosure proceedings against homeowners. “In many cases,” said Tashjian, “the banks were discovered to have processed thousands of foreclosures in a single day, all signed by one person.”

Donna Tashjian, a Certified Distressed Property Expert (CDPE), believes that the settlement presents a unique opportunity for homeowners who are in danger of losing their home. “The reality is, the banks would rather explore other options than foreclosure and this settlement gives them both the motivation as well as the funding to explore them,” said Tashjian.

Although the settlement is the largest government industry settlement since the $250 billion Big Tobacco settlement in 1998, there has been opposition on the grounds that the settlement does not go far enough to alleviate the $750 billion in negative equity in the country.

The participating banks are Bank of America, Ally, Chase, Citi and Wells Fargo. 5 billion dollars consisting of $2000 payments to borrows who were foreclosed on between Jan 1, 2008 and December 31, 2011 and who were subjected to the fraudulent practices. The other 20 billion will be used towards foreclosure alternatives. It is important to note Fannie Mae and Freddie Mac insured loans are not impacted by this settlement. Money will be distributed differently for the different states.

If you would like more information and contact numbers fore each of the lender, you may contact me if you wish. This is an important time as we all do our part to help homeowners avoid foreclosure. We bring tangible results with knowledge.

To your Success,

Donna