Saying the huge banks and mortgage lenders “ran roughshod over the legal processes” in foreclosing on people across the country, Connecticut Attorney General George Jepsen is one of only six attorneys general from across the nation involved in negotiating a settlement with the big lenders. Jepsen has been traveling to Washington, DC to sit at the table and hammer out an agreement.
“This [the potential settlement] is hugely important,” Jepsen tells The Hanging Shad. “This is a large, multi-state effort that could bring up to $25 billion dollars back to the states to help keep people in their homes.” The AG says just how much money may be realized from big lenders depends on whether the state of California participates in the suit.
Jepsen says he can’t say too much about the situation because the negotiations are continuing. He did say that it will include provisions such as a pot of “hard money” that would go back to the states for assistance to homeowners who are “underwater”—owe more on the home than it’s worth. Additionally, there will be money—possibly between $1500 and $2000—to go to each homeowners who have lost their homes already, as some assistance to start anew.
Also, a component of the settlement would set new protocols for future lending practices by the banks and mortgage lenders. For instance, lenders would be prohibited from pursuing “dual track approaches”—engaging in mortgage modification talks and foreclosure proceeding at the same time; lenders would have to hire more bilingual agents; and they would have to have one point of contact (no more multiple calls to a different person every time).
Jepsen joined with Gov. Malloy and other state officials to host foreclosure mitigation forum last month and earlier this month at the Connecticut Convention Center. Bank of America, Citibank, GMAC, HSBC and JPMorgan Chase were among the lenders at that forum and are some of the companies with which Jepsen is now negotiating in Washington. The numbers on foreclosures in Connecticut are frightening. http://www.courant.com/business/hc-foreclosure-prevention-20111110,0,314031.story
Jepsen has a strange group of critics on this one—people on the left end of the political spectrum. “It’s frustrating because those on the left are saying it’s simply a sop to the big banks. That’s simply not true,” he said.