Mississippi Gains $47 Million in Massive Mortgage Service SettlementBy Daniel Cherry | Published 10 Feb 2012 06:54pm |
Mississippians who lost their homes when the housing bubble burst might be in line for a little help. MPB's Daniel Cherry reports the state won millions of dollars in a settlement, and much of that is going back in consumers' pockets.
Mississippi Attorney General Jim Hood says the state brought in more than 47 million dollars as part of a massive 49 state settlement against five of the nation's largest mortgage servicers. Scott Spivey is with the Mississippi Home Corporation. They're an organization working to assist Mississippians with home ownership. He says the settlement is due in part to reckless lending practices.
"For a while there the joke was that if you had a pulse and could sign your name that you could get a mortgage. The due diligence wasn't being done. They weren't fully documented. A lot of people who couldn't afford a mortgage were getting it and they were struggling to meet it."
After that, the banks had to foreclose on the home. A resident who fell victim to such practices is now eligible to receive a small payout...only up to 2 thousand dollars. A drop in the bucket for someone who lost their home, but Spivey says it's encouraging to see the compromise.
"I think certainly the settlement is demonstrating a willingness on the part of the major servicers in the country to come to the table and say, 'Well this isn't a one-sided issue. We're not going to say, 'OK. Well it's your loan. You're going to have to find a way to pay us or we're going to take your house.'"
Of the 47 million dollars, about 33 million will go to consumers in some fashion. Another 14 million will go into Mississippi's general fund. Attorney General Jim Hood is proud of the settlement, but he's considering further action.
"I was one of the AGs who felt like somebody needs to go to jail. Something like $17 trillion dollars of wealth was lost because of what some of these greedy Wall Street bankers have done to us."
Hood says lenders should be reaching out to affected consumers in the coming months to notify them of their payout.
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