By WNYC's Ilya Marritz
New York has joined a $25 billion state and federal settlement with five major banks that would resolve claims over "robo-signing" and other abuses of the foreclosure process.
The agreement will result in principal and interest rate reductions for millions of Americans — and as many as 118,000 residents of New York state — whose outstanding balances on their mortgages are worth more than their homes.
State and federal officials had been in talks with the major mortgage servicers for over a year, and there have been rumors for months that an agreement was close.
But until the last minute, it was unclear whether New York would join. In August, New York Attorney General Eric Schneiderman, left the negotiation table, claiming the draft agreement would have given banks broad immunity from prosecution on the origination and packaging of mortgages. Now the Schneiderman has given the settlement his enthusiastic support.
"For a year, the proposed settlement was simply inadequate,” Schneiderman said in a statement, “and I applaud all those who fought with us to hold banks accountable for their role in the foreclosure crisis, provide meaningful relief to New York’s struggling homeowners, and allow a full airing of the facts to ensure that abuses of this scale never happen again.”
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