Loans will be reduced for one million households after five major companies committed foreclosure abuse. The five companies responsible for foreclosure delinquencies are Wells Fargo, Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial. Uncertain about the responsibility of these banks, states are now charging them $26 billion – out of this fee is $1.5 million that will be contributed to homeowners.
New Jersey rose 118 percent to 1,136 foreclosures, consistent between April and May. And Georgia’s foreclosures increased by 32.9 percent in April 2011 and 30 percent in May 2011. According to CNN Money, a total of 205,990 U.S. homes experienced foreclosure.
The charges of delinquencies pertained to signing documents they had not even read, used a false signature and essentially did not authenticate homeowners’ documents. This is referred to as “robo-signing,” according to CNN Money. This slowed the foreclosure process down, and the reimbursement fee is to be used as a solution, announced Thursday. “Robo-signing” was not noticed until late 2010.
"That the May numbers were up the month after that settlement was completed is an indication that lenders are more confident that there are clear ground rules to foreclose now, so they can play by the rules," said Daren Blomquist, RealtyTrac's vice-president.
The goal of these banks is to accumulate foreclosures. Throughout the last two years, bank foreclosures have caused a seven percent increase to 54,844 home repossessions, up from April’s foreclosure numbers.
"The jump in May foreclosure starts shows that it's going to be a bumpy ride down to the bottom of this foreclosure cycle," said Brandon Moore, CEO of RealtyTrac.
According to The Blaze, the settlement of $26 million would be the biggest monetary solution, for a lone industry, since the 1998 tobacco deal.