Record $17 billion agreement to include relief for consumers, while help from previous settlements slow to arrive
Washington [August 21, 2014]— The U.S. Department of Justice (DOJ) and Bank of America have reached an agreement, the two parties announced today. The settlement, which includes nearly $17 billion in fines and damages, is the largest-ever resolution between the federal government and a company. The agreement comes after months of negotiations between the bank and the DOJ over the wrongdoing that led to the mortgage crisis.
Homeowners and advocates throughout the country are expressing skepticism, mixed with hope, that the billions of dollars of relief for homeowners included in the settlement will reach the families who desperately need it. The settlement agreed upon calls for about $7 billion in such relief.
“A fine, even a record fine, is a long way from justice for bankers who crashed the world economy, took so many people’s homes and who continue to devastate the lives of families and communities across the country,” said Betsy Andrews of West Seattle, Washington, one of thousands of homeowners affected by the foreclosure crisis, and one of those arrested at the Department of Justice in a May, 2013 rally. “But if this settlement truly helps keep some of the families fighting for their homes from being put out on the street, it was more than worth the time I spent in jail demanding that our government hold Wall Street accountable."
Organizations representing struggling and “underwater” homeowners say that help from last year’s record $13 billion settlement with JPMorgan Chase has yet to arrive. And housing counselors and homeowners have not noticed any new waive of modifications. Rather, they say, Chase and other major banks seem to be seeking to get such loans off their hands by transferring servicing rights to newer mortgage companies not covered by major mortgage settlements.
"Although we're happy to hear Bank of America is once again being forced to pay for its maltreatment of homeowners, my husband Denfield and I hope this record-setting settlement will provide homeowners like us with much-needed relief,” said Robin James of East Orange, New Jersey. “But we also hope that this will stop their pattern of dual tracking, lost paperwork, and a lack of transparency that despite our best efforts have only led us further along the path to losing our home. These actions by Bank of America are not a thing of the past, they are still happening to us and many others like us. We hope this settlement will put a stop to it once and for all."
In cities throughout the United States, homeowners and community leaders have come together in a series of powerful direct actions asking Attorney General Eric Holder to personally intervene, ensuring that the banks follow-through on their commitments. In addition, advocates and homeowners are asking Holder and his staff to stop the practice of major banks transferring servicing rights to other mortgage companies, allowing them to avoid providing promised relief to consumers.
The Home Defenders League is a national organization fighting against foreclosures and for a just resolution to the mortgage crisis including mass principal reduction for underwater homeowners.