Ohio Mortgage Settlement

February 11, 2012 by staff 

Ohio Mortgage Settlement, Ohio’s attorney general said Thursday that a landmark settlement with big mortgage lenders over foreclosure abuses will deliver $335 million to the state.

The deal was struck with the nation’s five biggest mortgage servicers: Ally Financial, Bank of America, Citi, JPMorganChase and Wells Fargo.

Attorney General Mike DeWine said Ohio’s share of the $25 billion deal involving 49 states will bring “much-needed relief to Ohio homeowners and communities and help our state to recover from the destruction left behind from the mortgage financing crisis.”

DeWine said settlement dollars will be directed to four areas:

— $102 million for Ohio borrowers seeking direct relief, including loan modifications;

— $44 million for victims of mortgage abuse who lost their houses between Jan. 1, 2008 and Dec. 11, 2011;

— $90 million in refinanced loans for those who owe more than their house is worth; and,

— $97 million for ongoing efforts in neighborhood revitalization and foreclosure and fraud prevention.

Ohio was among states hardest hit by the mortgage crisis, with new foreclosure filings in 2010 of 85,483 — or one foreclosure for every 59 housing units. Nearly one in three mortgage holders in the state owe more on their home loan than the property is now worth.

DeWine urged borrowers to contact their mortgage servicer for information on modifying their existing loan or seeing if they are eligible for relief under the settlement. U.S. Sen. Sherrod Brown, who has pushed federal legislation against foreclosure abuse, welcomed the settlement.

Brown said in a statement, however, that Congress needs to take action to prevent future servicer fraud and errors, improve foreclosure prevention and consumer counseling, and rein in mortgage-based investing.

“Too many Americans were steered into unfair mortgages by fast-talking brokers then illegally foreclosed upon by Wall Street banks cutting corners,” he said. “Today’s settlement is an important victory for homeowners and communities devastated by the housing crisis. But it only scratches the surface of problems with the housing industry that need to be addressed.”

In an unusual public release, ousted former Ohio Attorney General Marc Dann warned Ohioans against being sucked in by the terms of the settlement and giving up on legitimate legal claims that could yield bigger payouts.

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