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Foreclosure Victims Can Cash in on Banks' 'Robosigning' Settlement

The years between 2008 and 2011 were not so good for Massachusetts homeowners. That's because it was a time when more than 21,000 homeowners lost their homes through the foreclosure process.

At the same time, home prices were going crazy, jobs were disappearing like David Copperfield was in control, and national banks were foreclosing on homes that people could no longer afford. However, they were skipping important steps in the foreclosure process through a practice now known as "robosigning," according to the Boston Globe. This type of signing meant that no one was properly reviewing the paperwork necessary to repossess a house.

A group of attorneys general from around the country filed a lawsuit against the banks on behalf of former homeowners that resulted in a $25 billion settlement, according to the Globe. Since the settlement has been approved by Massachusetts Attorney General Martha Coakley, former homeowners in the state will have a chance to receive some compensation for the banks' misdeeds.

Forms are now being sent to those former owners who lost their homes between 2008 and 2011, according to the Globe. The nearly $14.6 million in settlement funds allocated to Massachusetts will be split among those who fill out the forms to claim their share of the settlement.

This settlement is likely cold comfort to those who lost their homes during the peak of the crisis. However, it's possible that the settlement, along with other outside pressure, will force banks to take more care in dealing with its customers.

The purpose of the foreclosure process is to make sure that homeowners have every chance possible to keep their house. It is this interest in property that the law is trying to protect. However, once a home is in foreclosure, banks have little faith that a person will be able to regain the financial stability to resume payments.

Hopefully after this run of foreclosures, banks and borrowers have a more realistic picture of what property values should be. With that, more reasonable loans will be made and there will be fewer reasons for foreclosure.

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