Las Vegas (KSNV MyNews3) -- Along with helping struggling Americans, the $26 billion mortgage settlement also comes with a new set of rules for the banks that set a much higher standard when it comes to foreclosing homes.
The banks involved in the settlement serve nearly 60 percent of the nation’s mortgages, and from here on out, they will have strict protocol to follow, combined with serious consequences for disobeying the new rules.
The rules require the five banks involved – Bank of America, Citigroup, Wells Fargo, Ally Financial, and JPMorgan Chase -- to not only stop robo-signing documents, but also to notify a delinquent customer in advance of initiating a foreclosure. It also sets up timelines and procedures for reviewing loan modification applications and mandates that banks set up a single point of contact for each borrower.
Homeowners will be able to appeal if they are turned down for help, and banks will be barred from initiating foreclosures at the same time as processing loan modifications.
An independent monitor is in charge of watching the banks, and is prepared to fine banks up to $1 million per offense, or $5 million for repeat offenses. The monitor will be required to file and publish regular reports that identify servicers who don't follow the new guidelines.