Martha Coakley, Massachusetts Attorney General: Mortgage Settlement Is Only The Beginning
The $25 billion settlement with five of the nation's largest banks over charges of widespread mortgage fraud, announced Thursday, isn't the end for Massachusetts.
Massachusetts Attorney General Martha Coakley said at a press conference Thursday that she plans to pursue further relief for homeowners.
"We believe there is still much work to do," said Coakley, who was one of the more outspoken attorneys general during the settlement negotiations. "This is only five banks ... We have Fannie and Freddie. We have 19 other lenders."
Coakley said that the settlement will not prevent her from pursuing further criminal probes against lenders, in order to help homeowners who have been "caught in the unlawful and unnecessary foreclosure machine."
"What we are looking to do is prevent unnecessary foreclosures," Coakley said. "That is our mission for now: to do investigations where there is criminal activity."
The U.S. government reached the $25 billion settlement with Bank of America, Citigroup, JPMorgan Chase, Ally and Wells Fargo over improper foreclosures on homeowners without proper documentation.
The settlement will not prevent more government lawsuits against banks in the future.
In total, the settlement is the largest multi-state agreement since the nationwide tobacco settlements in 1998. Forty-nine states are to receive a piece of a $5 billion cash payout as part of the deal. Only Oklahoma did not agree to the settlement.
Massachusetts was one of the four states that most actively resisted a settlement with the banks. California, New York, Delaware and Massachusetts all announced their cut of the nationwide deal on Thursday, saying they would receive relatively large cash awards.
Coakley said that Massachusetts will receive $318 million from the mortgage settlement, as well as an extra $46 million to ensure that the banks in the settlement actually pursue loan modifications for underwater and delinquent borrowers. Massachusetts families who lost their homes to foreclosure between 2008 and 2010 also will receive cash payments of up to $2,000 because of the sheer disorderliness of the foreclosure process, she said.
"It will provide for people who have been victimized, really, by the lack of willingness or ability of the banks to work with families even when it would be commercially reasonable for them to do so," she said.
Coakley said the settlement was an important step in providing relief for borrowers and justice after "the corruption of the land court system" through the Mortgage Electronic Registration Systems, which many banks used as a substitute for organized paperwork for borrowers.
"Rather than wait for two more years ... we wanted to get started on this, and we're hopeful that this will provide real relief," she said. "There is so much blame to go around. We needed to get some remedies in place."