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LAS VEGAS — The $1.5 billion that Nevada homeowners stand to get from a $25 billion foreclosure abuse settlement with the nation's five largest lenders will provide “adequate and immediate consumer relief” for the state hit hardest by the recession, state Attorney General Cath erine Cortez Masto said.
“This settlement represents a step in the right direction,” Masto said in a statement outlining provisions of the agreement among 49 states and mortgage lenders Bank of America Corp., JPMor gan Chase & Co., Wells Fargo & Co., Citigroup Inc. and Ally Financial Inc.
“Nevada did well,” Masto said.
Before signing, the attorney general said Nevada won separate promises from Bank of America to set aside $750 million to reduce principal and facilitate short sales in Nevada, to suspend foreclosure sales against any borrower eligible for the National Homeownership Retention Program, and to pay $30 million for state consumer protection programs.
The provisions of the BofA agreement represent about half of the $1.5 billion that Nevada and homeowners would receive. Masto said it represented an improvement from what the state would have received under the multistate settlement alone.
Masto, a Democrat who initially balked at signing the agreement, said that she and her deputies “surgically” reviewed the proposed agreement “to ensure that it delivers adequate and immediate consumer relief without the associated years and risk of litigation.”
Nasser Daneshvary, director of the Lied Institute for Real Estate Studies at the University of Nevada, Las Vegas, called the $25 billion nationwide settlement “a drop in the bucket.” But he noted that Nevada, with less than 1 percent of the nation's population, stands to draw 6 percent of the settlement funds.
“Something good has been done there,” Daneshvary said.
The Lied Institute tallies 100,000 foreclosures since 2007 in southern Nevada, and Daneshvary estimated that about half the homes in the state, or an additional 400,000 homeowners, are “underwater,” owing more than their houses are worth.
Nationwide, authorities say, about 11 million households are underwater. The settlement requires the banks to reduce loans for about 1 million households at risk of foreclosure. The lenders will also send $2,000 each to about 750,000 Americans who were improperly foreclosed upon from 2008 through 2011. The banks will have three years to fulfill terms of the deal.
In Nevada, Masto said, an unknown number of borrowers will receive an estimated $1.3 billion in benefits from loan term modifications and other direct relief.
She put the value of refinanced loans to underwater borrowers in Nevada at $42 million and said borrowers who lost their homes to foreclosure from 2008 to 2011 and suffered servicing abuse would qualify for $57 million in cash payments.
The state will also receive a $60 million direct payment, Masto said.
Daneshvary credited Masto with not giving up Nevada's ability to press forward with criminal prosecutions and civil investigations.
The Nevada attorney general last year obtained an indictment accusing two title officers for the nation's largest lender services company of running a so-called “robo-signing” scheme to sign and file thousands of fraudulent foreclosure documents in Las Vegas.
“The settlements do not prohibit Nevada from continuing to pursue criminal actions against the banks,” Masto said in her statement. It also doesn't stop homeowners or investors from pursuing individual, institutional or class-action civil cases against the five banks.”
“This settlement represents a step in the right direction,” Masto said in a statement outlining provisions of the agreement among 49 states and mortgage lenders Bank of America Corp., JPMor gan Chase & Co., Wells Fargo & Co., Citigroup Inc. and Ally Financial Inc.
“Nevada did well,” Masto said.
Before signing, the attorney general said Nevada won separate promises from Bank of America to set aside $750 million to reduce principal and facilitate short sales in Nevada, to suspend foreclosure sales against any borrower eligible for the National Homeownership Retention Program, and to pay $30 million for state consumer protection programs.
The provisions of the BofA agreement represent about half of the $1.5 billion that Nevada and homeowners would receive. Masto said it represented an improvement from what the state would have received under the multistate settlement alone.
Masto, a Democrat who initially balked at signing the agreement, said that she and her deputies “surgically” reviewed the proposed agreement “to ensure that it delivers adequate and immediate consumer relief without the associated years and risk of litigation.”
Nasser Daneshvary, director of the Lied Institute for Real Estate Studies at the University of Nevada, Las Vegas, called the $25 billion nationwide settlement “a drop in the bucket.” But he noted that Nevada, with less than 1 percent of the nation's population, stands to draw 6 percent of the settlement funds.
“Something good has been done there,” Daneshvary said.
The Lied Institute tallies 100,000 foreclosures since 2007 in southern Nevada, and Daneshvary estimated that about half the homes in the state, or an additional 400,000 homeowners, are “underwater,” owing more than their houses are worth.
Nationwide, authorities say, about 11 million households are underwater. The settlement requires the banks to reduce loans for about 1 million households at risk of foreclosure. The lenders will also send $2,000 each to about 750,000 Americans who were improperly foreclosed upon from 2008 through 2011. The banks will have three years to fulfill terms of the deal.
In Nevada, Masto said, an unknown number of borrowers will receive an estimated $1.3 billion in benefits from loan term modifications and other direct relief.
She put the value of refinanced loans to underwater borrowers in Nevada at $42 million and said borrowers who lost their homes to foreclosure from 2008 to 2011 and suffered servicing abuse would qualify for $57 million in cash payments.
The state will also receive a $60 million direct payment, Masto said.
Daneshvary credited Masto with not giving up Nevada's ability to press forward with criminal prosecutions and civil investigations.
The Nevada attorney general last year obtained an indictment accusing two title officers for the nation's largest lender services company of running a so-called “robo-signing” scheme to sign and file thousands of fraudulent foreclosure documents in Las Vegas.
“The settlements do not prohibit Nevada from continuing to pursue criminal actions against the banks,” Masto said in her statement. It also doesn't stop homeowners or investors from pursuing individual, institutional or class-action civil cases against the five banks.”
