Kasandra Brabaw (Patch Staff)
January 22, 2015 at 9:03am
Four national banks owe Massachusetts $2.7 million after settling a lawsuit from the state’s attorney general, Martha Coakley.
Bank of America, J.P. Morgan Chase, Citi and Wells Fargo Bank were all named in the lawsuit, which claimed the banks illegally foreclosed on Massachusetts homes.
Massachusetts law states that “a foreclosure is void unless a bank or other foreclosing party is the mortgagee of record or holds the mortgage through a valid assignment before publishing the notice of foreclosure sale,” according to a statement from Coakley.
When the banks foreclosed on Massachusetts homeowners, the lawsuit claims, they did not hold the mortgage for those properties. The foreclosures then make property titles defective and pose problems for future homeowners.
“This settlement holds these four national banks accountable for violating state law and cutting corners in the foreclosure process,” Coakley said in a statement.
In addition to the $2.7 million settlement, the banks have agreed to “assist a consumer who makes a claim that the title to his or her residence is void from an unlawful foreclosure.”
In order to help those people, the banks will conduct a thorough title review, provide curative documents, release junior liens held by the banks, and, in cases where consumers do not have title insurance, pay reasonable costs associated with the title cure.