FOR IMMEDIATE RELEASE
February 9, 2012
For More Information, contact:
Joy Patterson (334) 242-7491
Alabama Attorney General
Suzanne Webb (334) 242-7351
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Alabama Joins $25 Billion Joint State-Federal
Mortgage Servicing Settlement on Foreclosure Wrongs
State share of national settlement estimated at $106,701,096
(MONTGOMERY)–Attorney General Luther Strange Thursday formally joined a
landmark $25 billion national joint federal-state agreement with the nation’s five largest
mortgage servicers over foreclosure abuses and fraud, and unacceptable nationwide mortgage
The proposed agreement provides an estimated $ 106,701,096 in direct relief to Alabama
homeowners and addresses future mortgage loan servicing practices. U.S. Attorney General
Eric Holder, U.S. Housing and Urban Development (HUD) Secretary Shaun Donovan and a
bipartisan group of state attorneys general announced the settlement in Washington, D.C.
“This agreement not only provides much needed relief to Alabama borrowers, but it also
puts a stop to many of the bad behaviors that contributed to the mortgage mess in our state and
across the country,” said Attorney General Strange.
The state’s estimated share of the settlement is $106,701,096.
Alabama’s borrowers will receive an estimated $29,879,070 in benefits from loan term
changes and other relief.
Alabama’s borrowers who lost their home to foreclosure from January 1, 2008 through
December 31, 2011, and encountered servicing abuse would qualify for $20,595,756 in
payments to borrowers.
The value of refinanced loans to Alabama’s underwater borrowers would be an estimated
The state will receive a direct payment of $26,474,753 directed to the Attorney General’s
The unprecedented joint state-federal settlement is the result of a massive civil law
enforcement investigation and initiative that includes state attorneys general and state banking
regulators across the country, and nearly a dozen federal agencies. The settlement holds banks
accountable for past fraud and abuses and provides relief to homeowners. With the backing of
a federal court order and the oversight of an independent monitor, the settlement stops future
fraud and abuse.
Under the agreement, the five servicers have agreed to a $25 billion penalty under a joint
state-national settlement structure.
501 Washington Avenue Montgomery, AL 36104 (334) 242-7300
www.ago.alabama.gov Page 2 of 2
Servicers commit a minimum of $17 billion directly to borrowers through a series of
national homeowner relief effort options. Servicers will likely provide up to an estimated
$32 billion in direct homeowner relief.
Servicers commit $3 billion to an underwater mortgage refinancing program.
Servicers pay $5 billion to the states and federal government ($4.25 billion to the states and
$750 million to the federal government).
Homeowners receive comprehensive new protections from new mortgage loan servicing
and foreclosure standards.
An independent monitor will ensure mortgage servicer compliance.
States can pursue civil claims outside of the agreement including securitization claims as
well as criminal cases.
Borrowers and investors can pursue individual, institutional or class action cases regardless
The settlement does not grant any immunity from criminal offenses and will not affect
criminal prosecutions. The agreement does not prevent homeowners or investors from
pursuing individual, institutional or class action civil cases against the five servicers. The pact
also enables state attorneys general and federal agencies to investigate and pursue other aspects
of the mortgage crisis, including securities cases.
Scope of Settlement
This enforcement action targets one segment of the nation’s vast and complex mortgage
market, though the new servicing standards will apply to all mortgage loans serviced by the
“While this settlement includes significant relief for homeowners, it also puts in place
new protections for homeowners in the form of mortgage servicing standards,” said Attorney
The final agreement, through a consent judgment, will be filed later in U.S. District
Court in Washington, D.C., and will have the authority of a court order.
Because of the complexity of the mortgage market and this agreement, which will span a
three year period, borrowers in some cases may be contacted directly by one of the five
included mortgage servicers regarding loan modification offers, may be contacted by a
settlement administrator or their state attorney general, or may need to contact their mortgage
servicer to obtain more information about specific programs and whether their loan qualifies.
More information will be made available as the settlement programs are implemented.
For more information on the proposed agreement:
www.NationalMortgageSettlement.com Bank of America: 1-877-488-7814
www.HUD.gov Citi: 1-866-272-4749
www.DOJ.gov Chase: 1-866-372-6901
Wells Fargo: 1-800-288-3212