Settlement Does Little to Help Some Homeowners - 8 News NOW

I-Team: Settlement Does Little to Help Some Homeowners

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LAS VEGAS -- Financially struggling homeowners who thought they were protected from foreclosure by the National Mortgage Settlement may be surprised to learn that isn't always the case.

Wells Fargo, Bank of America, Ally, Citibank and Chase agreed to offer protections to homeowners, but now, some homeowners are finding out their mortgages have been sold to other companies, who don't have to provide any protections.

Nevada lawmakers want to fix the issue. They want to expand those protections to all Nevada homeowners, no matter who owns the mortgage.

Under the settlement with the big banks, homeowners receive three main protections. Banks have to provide one person to handle the home loan, bank officials must keep track of the paperwork and a homeowner won't face foreclosure if they were working to modify the loan.

The National Mortgage Settlement was criticized by activists and homeowners alike for plenty of reasons. Nobody went to prison, banks paid a small amount compared to their profits, and homeowners generally felt they weren't helped enough. 

Major banks ramped up sales of the mortgages they own to little known companies. Greentree, Ocwen, Nationstar and Wingspan bought thousands of Nevada mortgages last year. Katherine Pentogenis discovered she had no legal protections against sudden foreclosure.

"If Bank of America had not transferred us to Greentree, we may have been able to refinance our mortgage and avoid the stress of the modification and constant fear that we didn't really know what was happening. Even if Bank of America had refused on the refinance, Bank of America would not be allowed to demand more payments while we were in loan modification trial plan," Pentogenis said.

Senate Bill 321 would extend foreclosure protections to all Nevada homeowners, no matter who services their mortgage.

Track SB321 and other bills on 8NewsNOW.com's Bill Tracker

Banking lobbyists told state senators that while principal reduction is popular, there's not much more they can do.

"Sixty-five percent of those loans, to reduce the principal they can not do. It's beyond their control because they're owned by federal entities," said George Ross, a Bank of America lobbyist.

"If you're going to enact this bill, I would suggest that you repeal foreclosure mediation," said Bill Uffelman with Nevada Banker's Association.

Democratic committee chair Senator Tick Segerblom let the bankers know just what he thought about their stance.

"We tried to find every evil person in the building and only found two," he said.

The so-called Homeowner's Bill of Rights faces its first committee vote Thursday.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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