By Rich Bockmann
As the foreclosure crisis in Queens showed signs of improvement, state Attorney General Eric Schneiderman announced New York state will receive more than $1 billion out of a historic settlement reached with JPMorgan stemming from its role in the financial crisis.
The $13 billion settlement, the largest ever levied against a single financial institution, requires the mortgage giant to pay $9 billion and provide another $4 billion in consumer relief to homeowners across the country who are at risk of foreclosure.
Southeast Queens was the epicenter of the failed mortgage catastrophe in New York City and one of the worst hit regions in the country.
The latest housing data for Queens is encouraging, with foreclosure activity down 11.4 percent in October from the previous year, according to the market-research company RealtyTrac.
Schneiderman said that out of New York’s share of the settlement, $613 million will be paid out in cash to struggling homeowners and the remaining $400 million will be doled out in the form of consumer relief.
“Since my first day in office, I have insisted that there must be accountability for the misconduct that led to the crash of the housing market and the collapse of the American economy,” said Schneiderman, who co-chairs the multi-state and federal task force created to investigate the mortgage-backed securities crisis.
“This historic deal, which will bring long-overdue relief to homeowners around the country and across New York, is exactly what our working group was created to do,” he added. “We refused to allow systemic frauds that harmed so many New York homeowners and investors to simply be forgotten, and as a result we’ve won a major victory today in the fight to hold those who caused the financial crisis accountable.”
Jennifer Ching, director of Queen Legal Services, said the financial relief from the settlement will help thousands of homeowners who have for years struggled to modify their mortgages and stay in their homes.
As part of the settlement, JPMorgan acknowledged it had misled investors by marketing mortgage-backed securities that the company’s employees knew did not comply with underwriting guidelines.
U.S. Attorney General Eric Holder said the investigation finally called JPMorgan to task for its role in the country’s financial crisis.
“Without a doubt, the conduct uncovered in this investigation helped sow the seeds of the mortgage meltdown,” he said. “JPMorgan was not the only financial institution during this period to knowingly bundle toxic loans and sell them to unsuspecting investors, but that is no excuse for the firm’s behavior. The size and scope of this resolution should send a clear signal that the Justice Department’s financial fraud investigations are far from over.”
Reach reporter Rich Bockmann by e-mail at rbockmann@cnglocal.com or by phone at 718-260-4574.
