An $8.5 billion settlement will be divided among roughly 96,000 Ohioans, including 4,000 individuals from the Mahoning Valley, after a deal last week with 10 major banks to settle claims of abusive foreclosure practices.
But U.S. Sen. Sherrod Brown said Wednesday that the deal is not nearly enough to compensate the millions of Americans who lost their homes during the foreclosure crisis.
Under the deal, those eligible for direct payments or loan modifications could receive up to $2,125.
“It’s a step forward, but obviously it’s not going to be enough,” Brown said. “This settlement is not nearly what it should have been, and our next step is to see to it that this money gets distributed the right way.”
Brown gathered with officials from Community Legal Aid, a nonprofit agency serving low-income and elderly residents in Northeast Ohio, at their offices at First National Tower downtown.
Kathleen and Neil Smith of East Liverpool also shared the story of their two-year dispute with Wells Fargo, which eventually led to the couple’s selling their home on a short sale and losing about $185,250 after the bank botched their loan modification and informed them that they faced foreclosure instead.
Brown, who serves on the Senate Banking Committee, said he hopes that the latest settlement will lead to more legislation that better protects homeowners. He is pushing for passage of a bill that would require banks to provide clear disclosures to consumers near default, participate in loan modifications and stop foreclosures when borrowers are trying to pay their bills on time.
“Banks have to hire more people to do this right; we have to do more,” Brown said. “People should not have to hire a lawyer or call my office because the bank made a mistake. It’s too often the case when banks are in such a hurry to write mortgages because the fees are more important than the people.”