Sarah Mirando  |  May 15, 2012

Category: Legal News

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Historic National Mortgage Settlement Approved

By Kimberly Mirando

 

National Mortgage Settlement
 
A $25 billion foreclosure settlement with the nation’s five largest banks has been approved, settling foreclosure abuse charges dating back to 2008. The historic settlement will allow nearly 2 million of the nation’s hardest hit home borrowers to see a significant reduction in their mortgage payments.
 
Under the national mortgage settlement, Bank of America, Wells Fargo, JPMorgan Chase, Citigroup and Ally Financial agreed to reduce the principal on loans held by underwater homeowners, refinance some mortgages to the current low interest rates, and compensate those who lost their homes to improper foreclosure practices.
 
The banks also agreed to stop “dual-tracking,” or evaluating homeowners for mortgage modifications while simultaneously initiating foreclosure proceedings on them, as well as to stop “robo-signing” — using false documentation to rush homes into foreclosure.
 
So what does this mean for borrowers?
 
The national mortgage settlement is similar to a class action lawsuit settlement in that it provides relief to a nationwide class of homeowners who were victims of foreclosure abuse (except for borrowers in Oklahoma).
 
Of the roughly $25 billion national mortgage settlement, at least $17 billion will go to reducing principal for borrowers who are underwater. These eligible borrowers will be able to receive about $20,000 in principal reduction from four of the banks, while Bank of America borrowers will average $100,000 or more.
 
Another $3 billion of the settlement will go toward refinancing mortgages for borrowers who are current on their payments, allowing them to take advantage of the historically low interest rates that are currently available.
 
The banks will also pay $5 billion to the states and federal government to pay homeowners who lost their homes to foreclosure. This fund will provide cash payments of $1,500 to $2,000 to eligible borrowers who lost their home to foreclosure between January 1, 2008 and December 31, 2011. A settlement administrator will send claim forms to persons eligible for this cash restitution.
 
Borrowers are encouraged to contact their mortgage servicer to obtain more information about specific loan modification programs and whether they will be impacted by the national mortgage settlement. 
 
For more information about the National Mortgage Settlement, go to www.NationalMortgageSettlement.com.

 

 

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Updated October 4th, 2012

 

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14 thoughts onHistoric National Mortgage Settlement Approved

  1. Harold Longberg says:

    Add me! We lost one of our homes! We were not approved for any modifications. They denied us over the phone and said we did not qualify on our homes for a modification.

  2. Kami says:

    I am pretty upset about all of this. I wrote to my Attorney Generals office and they told me I was a couple weeks late to file for this….so many people like myself who were charged bogus charges & interest for loan mods that were promised by our banks and never took place…we got screwed! I was forced to take out personal loans from friends and relatives and never got notice of this class action suit so now I am screwed again. Chase Rep told me that if I did not come up with money plus interest on that day Chase would foreclose on me…..and this was over the phone….they never sent me any foreclosure notices….I was supposed to be awaitng approval for my loan mod which I was assured would go through.

  3. Candace Deponte says:

    Bank Of America is pulling the same crap on me right now. They claimed to have sold my mortgage to Select Portfolio Services just when they had said they would approve the Mod so they could get out of honoring the Mod. Select Portfolio is A PART OF BANK OF AMERICA. They just want to steal my home. This has been going on for about 20 months. I want to get on the class action. Who do I call?????

  4. Anonymous says:

    $1,200-$2,000—really! How much of the 5 billion will go into the State’s own funds. How ironic, I asked BOA to reduce my mortgage payment by $1,200.00 for a time period so that I could keep my home after my husband deserted me and I was basically laughed at and told it would never happen. Now, my credit is ruined and I cannot even afford to buy a desperately needed used car.

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