Federal Government & Attorneys General Reach Landmark Class Action Settlement Requiring PRINCIPAL BALANCE REDUCTION ON MORTGAGES OR CASH SETTLEMENTS.

Roughly $25 billion in relief for distressed borrowers, states and federal government.

After many months of negotiation, 49 states' attorneys general and the federal government have reached agreement on an historic joint state-federal settlement with the country's five largest loan servicers: Ally/GMAC, Bank of America, Citi, JPMorgan Chase and Wells Fargo.

"I believe that this agreement will eventually make widespread principal reduction throughout the country commonplace," Iowa Attorney General Tom Miller, who led the talks on behalf of the states, told reporters. "There's going to be a significant amount done right away."

The information made available through the "National Mortgage Settlement Public Information Portal" says, "This is the second largest civil settlement ever obtained by the states attorneys general. It's second only to the tobacco settlement that has spread payments to the states over 25 years. The settlement will cost the nation's five largest mortgage servicers, which control about 60 percent of the mortgage servicing market, an estimated $25 to $32 billion.

"The settlement will require the banks to accomplish a massive undertaking – changing their broken system of servicing loans into one that is functional. The banks will reduce the principal on many of their loans – something that they have resisted for years – to allow homeowners to keep their homes. They will also refinance loans for "underwater” borrowers who have been unable to refinance due to negative equity. They will pay billions of dollars to the states, and, most importantly, commit billions more to consumers. The banks will be subject to a federal court order enforceable by a federal judge.

"This means that to enforce your rights under this "Class Action Federal Court Case Settlement” you either require an understanding of Multi-complex Federal Class Action Law or hire Counsel who does. This area of Practice is very specialized. We at Federal Housing Assistance Group specialize in protecting the rights of individuals who are entitled to the relief ordered by the Courts in complex class action cases thought the Country."

» READ MORE ABOUT THE SETTLEMENT →