$1.5 billion settlement will benefit Nevada homeowners
February 9, 2012
A $25 billion joint federal-state settlement with the nation’s five largest mortgage servicers over foreclosure and nationwide mortgage servicing practices will help Nevada homeowners, state officials said.
The Nevada settlement of the Bank of America lawsuit will set aside $750 million in first and second lien principal reduction and short sales in Nevada, require Bank of America to suspend its foreclosure sales of any borrower eligible for the National Homeownership Retention Program, solicit eligible homeowners, fund an aggressive outreach effort to ensure that borrowers are made aware of the relief available to them and pay $30 million to the State of Nevada for consumer protection efforts.
The Nevada Bank of America settlement will bring in more money for Nevadans than what would have been available under the multistate settlement alone, Nevada Attorney General Catherine Cortez Masto announced today. The settlements are in proportion to that of California, who has also been devastated by the foreclosure crisis.
The Silver State’s estimated share of the national settlement is $1.5 billion:
• Nevada borrowers will receive an estimated $1.3 billion in benefits from loan term modifications and other direct relief.
• Nevada borrowers who lost their home to foreclosure from January 1, 2008 through December 31, 2011 and suffered servicing abuse would qualify for $57 million in cash payments to borrowers.
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• The value of refinanced loans to Nevada underwater borrowers would be an estimated $42 million.
• The state will receive a direct payment of $60 million in addition to the $30 million settlement with BoA.
The settlements do not prohibit Nevada from continuing to pursue criminal actions against the banks. 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.