Pennsylvania and 48 other states joined the $25 billion settlement announced Thursday. The money will help homeowners facing foreclosure, borrowers who lost their homes and people who owe more than their homes are worth, Kelly said.
She said that the complexity of the agreement will require several months for it to result in action and that consumers should be wary of scams linked to it in the meantime.
Many people who are eligible for help will be contacted by their banks, mortgage servicing companies, the attorney general's office or the national settlement administrator, or they can look for updates on the attorney general's website or the national settlement site for help, Kelly said.
The deal won't help everybody because it applies only to privately held mortgages issued from 2008 through 2011. Those owned by mortgage giants Fannie Mae and Freddie Mac are not covered by the deal.
After the nation's housing bubble burst, many companies processed foreclosures without verifying documents. Some employees signed papers they hadn't read or used fake signatures to speed foreclosures, known as robo-signing.
Besides the payments and mortgage reductions, the deal is supposed to make it easier for people facing foreclosure to make their payments and keep their homes. People who lost their homes to foreclosure are unlikely to get their homes back or benefit much financially from the settlement.
The deal with Ally, Bank of America, Citi, JPMorgan Chase and Wells Fargo must get final approval by a federal judge.
Kelly said Pennsylvania's share will include $93 million for loan modifications and other aid; $21 million for borrowers who suffered servicing abuse and lost their homes to foreclosure; $81 million to refinance loans to homeowners who owe more than their homes are worth; and $69 million to the attorney general's office.
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