RALEIGH – On February 9th, the United States Justice Department released the details of a $25 billion dollar settlement reached with 5 major banks. The settlement occurred because the banks were accused of widespread use of automated signatures, called “Robo-signing.”
Robo-signing is a practice employed by banks to automate the processing and approval of foreclosure proceedings against homeowners. “In many cases,” said Linda Craft of Linda Craft & Team, REALTORS®. “The banks were discovered to have processed thousands of foreclosures in a single day, all signed by one person.”
However, Craft explained that as a Certified Distressed Property Expert (CDPE), she believes that the settlement presents a unique opportunity for homeowners who are in danger of losing their home. “The reality is, the banks would rather explore other options than foreclosure and this settlement gives them both the motivation as well as the funding to explore them,” said Craft.
Although the settlement is the largest government industry settlement since the $250 billion Big Tobacco settlement in 1998, there has been opposition on the grounds that the settlement does not go far enough to alleviate the $750 billion in negative equity in the country.