2012 News Releases

Schmidt announces landmark mortgage settlement for Kansas

Release Date: Feb 09, 2012

TOPEKA – (February 9, 2012) – More than 4,000 Kansas homeowners who lost homes to foreclosure and others still struggling to keep their homes out of foreclosure may be eligible for relief under a landmark legal settlement with the nation’s five largest mortgage servicers, Kansas Attorney General Derek Schmidt announced today.

“This settlement will not help every homeowner who suffered foreclosure during the Great Recession, nor does it resolve every claim of misconduct against lenders or mortgage servicers,” Schmidt said. “But it’s a dramatic step forward that will help many Kansans and will hold major financial institutions that played fast-and-loose with people’s lives accountable for their actions.”

The settlement was negotiated over the past 16 months by state attorneys general and representatives of the five mortgage servicers: Bank of America, JP Morgan Chase, Citibank, Wells Fargo, and Ally Financial (GMAC). Forty-eight states and the federal government are parties to the settlement announced today. It resolves allegations of robo-signing foreclosure affidavits and misconduct in the servicing of residential mortgage loans.

The settlement is expected to bring more than $50 million to Kansas in the form of direct payments to certain homeowners who lost homes to foreclosure, refinancing and other relief for homeowners still struggling to save their homes, expanded investigation of illegal conduct in the housing marketplace, and a civil penalty paid to the state. It is one of the largest consumer protection settlements in state history.

Schmidt said eligible Kansans will be contacted and offered the chance to file a claim. Kansans can find more information online at www.ksag.org/mortgage or by calling the Attorney General’s Consumer Protection Hotline at (800) 432-2310.

Nationwide, the settlement agreement totals $25 billion. The joint state-federal settlement is the result of a significant civil law enforcement investigation and initiative that includes state attorneys general and state banking regulators from around the country. Schmidt said the settlement does not grant any immunity from criminal offenses and will not affect criminal prosecutions. The agreement does not prevent homeowners or investors from pursuing individual, institutional or class action civil cases against the five mortgage servicers.

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News releases issued prior to 2011 are available through an archive hosted by the Kansas State Library.