Four banks to pay millions to Massachusetts

by MPA27 Jan 2015
JP Morgan Chase, Bank of America, Wells Fargo Bank and Citi have agreed to pay a total of $2.7 million to the state of Massachusetts after they allegedly foreclosed on homes they didn’t have a right to foreclose on.

Under the statutory power of sale and Massachusetts law, a foreclosure is void unless a bank or other foreclosing party is the mortgagee of record or holds the mortgage through a valid assignment before publishing the notice of foreclosure sale.The suit alleges that the banks didn’t follow this law and then would follow on the foreclosures, essentially making the sale void.

“Our continued work to address illegal foreclosures in Massachusetts plays an important role in ensuring liquidity in our housing market and providing relief to homeowners who purchased properties with defective titles,” Attorney General Martha Coakley said. “This settlement holds these four national banks accountable for violating state law and cutting corners in the foreclosure process.”

Under the settlement terms, the banks are required to assist a consumer who makes a claim that the title to his or her residence is void from an unlawful foreclosure by conducting a thorough title review, providing curative documents, releasing junior liens held by the banks and, in cases where consumers do not have title insurance, paying reasonable costs associated with the title cure.

Additionally, $700,000 of the $2.7 million the banks pay will be allocated to the Attorney General’s Local Consumer Aid Fund to provide consumer assistance. The remaining $2 million of the settlement will be paid to the Commonwealth's General Fund.

Click here to read the full settlement terms.


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