Monday, August 25, 2014

Mediator to Oversee Bank of America Settlement

A law professor and mediator will oversee billions in consumer relief for struggling borrowers as part of the settlement by Bank of America with the federal government. Veteran dispute resolver, Eric Green, will give or withhold credit on mortgage modifications and home loans for low income borrowers. Green served as mediator on various Bank of America cases. In 2011, a federal judge approved a $410 million settlement in a class-action lawsuit involving some 13 million customers affected by debit card overdrafts. That suit claimed the bank processed its debit card transactions from highest to lowest dollar amounts in order to maximize fees customers paid. That settlement sparked criticism because it gave some customers only a fraction of what they paid. Of this new record $16.65 billion settlement, $9.65 billion will be in cash payments to various federal agencies and six states, with the rest in consumer aid. The Department of Justice is restricted from overseeing Green, who will provide quarterly reports. Bank of America has until summer 2018, to provide the relief. Interestingly, Green did not play a role in the terms or in mediating the settlement. If the mediator determines Bank of America has not complied by the deadline, the bank would be required to make cash payments equal to its shortfall. That money would go to organizations that provide housing counseling and foreclosure prevention. See stories here-- and