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THE LATEST SERVICING Officials Seal Historic $25 Billion Servicer Settlement The nation's five largest servicers agree to a major deal with state and federal officials. M ore than a year's worth of rumors, negotiations, and reversals concluded in February with a $25 billion mega-settlement between govern- ment officials and the nation's five largest mortgage servicers. The size and scope of the settlement makes it the largest endeavor by state and federal officials in U.S. history. Federal officials and 49 state attorneys general closed a deal 50 | THE M REPORT with Ally Financial Corp., Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo that supplies homeowners in distress with new relief and establishes new servicing standards. Departments involved at the federal level ranged from the Justice Department to HUD and the Office of the Comptroller of the Currency. "This agreement reflects our commitment—at both the federal and state levels—to ensure justice, and to recover losses, for victims of reckless and abusive mortgage practices," U.S. Attorney General Eric Holder said at a recent press conference. The settlement will apportion $17 billion to homeowners who qualify for principal reduction and loan modification programs, $3 billion to those eligible to refinance their underwater mortgages, and $1.5 billion to approximately 750,000 others who lost their homes to faulty foreclosure practices. The historic agreement does not absolve the five servicers of separate or class-action lawsuits brought by homeowners or investors. Holder also said that it would not derail any action under way at the Residential Mortgage- Backed Securities Working Group, which the Obama ad- ministration recently unveiled. In a separate settlement totaling $1 billion, government officials resolved allegations of fraud committed by the Countrywide unit that Bank of America later acquired in 2008. The settlement helped raise settlements to $26 billion. Not all homeowners were con- sidered equal in the delegation of benefits. Qualifying California homeowners will receive $18 SECONDARY MARKET ANALYTICS SERVICING ORIGINATION