Illinois Announces Changes to National Mortgage Settlement

A landmark settlement that promised to provide relief for millions of homeowners in foreclosure has fallen short of its intended goals, according to a report from the Chicago Tribune. So in response to consumer complaints about continued issues with mortgage servicers, the terms of the settlement will soon be strengthened. 

The $25 billion settlement, which was announced in February 2012, was supposed to compensate homeowners who were the victims of foreclosure fraud. As part of the settlement, the nation’s five largest servicers also agreed to clean up their acts. 

But attorneys general in several states, including Illinois Attorney General Lisa Madigan, believe that the mortgage servicers aren’t holding up their end of the bargain. 

According to Madigan, the settlement was “supposed to eliminate headaches for borrowers, but homeowners continue to report problems.” Alarmingly, in Illinois over the past few months, 60 percent of the foreclosure cases reviewed by Madigan’s office included major errors. 

In response to the new trend of fraudulent activities among mortgage servicers, officials have announced changes to the settlement, although only Bank of America and Wells Fargo have agreed to the changes thus far.

The new rules require banks to give homeowners 60 days to submit extra documents that would help them modify their loan before the banks foreclose. Previously, homeowners only had 30 days to do this. In addition, the banks have agreed to monitor their employees more closely, and give homeowners more specific tips on how to avoid foreclosure.

If you believe your mortgage servicer isn’t communicating properly with you about your home loan, learn more about your legal rights by calling an Illinois foreclosure attorney today.