Released by the Justice Dept on Monday. First — the Complaint by US government agencies against Bank of America Corporation, JPMorgan Chase & Co., Wells Fargo and Company, Citigroup INC. and Ally Financial Inc.
(Click image for full doc)
And also the Consent Judgments for individual mortgage servicer banks, setting out the terms of the $25bn ($5bn in fines) settlement. Here’s Bank of America’s (click image for PDF):
The Journal gave a good preview of the balance struck in the deal between fining the banks and providing debt relief for homeowners. A big part of the deal means banks getting a certain dollar amount of credit back for specific actions on debt relief. So it’s interesting to see credit incentives given to get banks to start immediately:
10. Timing, Incentives, and Payments
a. For the consumer relief and refinancing activities imposed by this Agreement, Servicer shall be entitled to receive credit against Servicer’s outstanding settlement commitments for activities taken on or after Servicer’s start date, March 1, 2012 (such date, the “Start Date”).
b. Servicer shall receive an additional 25% credit against Servicer’s outstanding settlement commitments for any first or second lien principal reduction and any amounts credited pursuant to the refinancing program within 12 months of Servicer’s Start Date (e.g., a $1.00 credit for Servicer activity would count as $1.25)…
The foreclosure settlement – FT Alphaville