$8.5 Billion Payout by Banks for Wrongful Foreclosures
Ten banks who federal regulators say wrongly foreclosed on homeowners have agreed to a massive payout of $8.5 billion for their actions.
The settlement comes as a result of federal review of numerous foreclosure files of homes which showed that bank officials did not properly follow the required steps for legal foreclosure and foreclosed on many properties after paperwork went missing or was not correctly completed. Wells Fargo, JPMorgan Chase and Bank of America are among the gigantic financial institutions ordered to make restitution to homeowners.
In addition, Bank of America has agreed to pay Fannie Mae, the government sponsored finance agent for home mortages, an additional sum of $10.3 billion.
Although individuals and families whose properties were wrongly foreclosed since 2008 will receive compensation ranging from $1,000 to $125,000, many analysts complain that the banks are getting off too lightly, with many homeowners receiving an award that is actually less than their true loss.