Last night was the deadline for the attorneys general of each state to sign onto a massive settlement with the nation’s five largest mortgage lenders, and more than 40 of the states opted to join in the pot-sharing.
The settlement would reduce mortgages by about $20,000 for upward of 1 million homeowners and as many as 750,000 people who were foreclosed upon could see $2,000 settlement checks.
Among the few holdouts are two of the country’s largest and most populous states, California and New York, as well as Nevada and Arizona, two of the states hit the hardest by the collapse of the housing market.
While those behind the settlement are hoping that all the states will ultimately sign on — bringing the value of the settlement up to around the $25 billion mark — California AG Kamala Harris says there are “significant sticking points” currently keeping the state from signing onto the deal.
If a state decides to opt out of the settlement, its residents will not share in the benefits. The individual states could still continue to seek settlements on their own with the five lenders — Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial.
The settlement would apply only to privately held mortgages issued from 2008 through 2011.
More than 40 states agree to nationwide foreclosure settlement [NY Daily News]