How to File a Claim for National Mortgage Foreclosure Settlement
By Sarah Pierce
UPDATE 6/12/13: Checks will be mailed June 10 – June 17, 2013.
Claim Forms are being sent to 2 million U.S. home borrowers who lost their homes to foreclosure during the financial crisis of 2008 to 2011. Roughly $25 billion in relief has been established under the National Mortgage Settlement to go to borrowers who submit a claim form by the January 18, 2013 deadline.
Borrowers are warned to watch out for scams regarding the National Mortgage Settlement. You should not need to pay anyone to file your claim. Here’s more information:
What is the National Mortgage Foreclosure Settlement?
The historic $25 billion national foreclosure settlement was reached in February 2012 and approved in May 2012. It was negotiated by 49 states and the federal government to provide financial relief to borrowers who had their mortgages serviced by Ally/GMAC, Bank of America, Citi, JPMorgan Chase, and Wells Fargo and lost their homes between January 1, 2008 and December 31, 2011.
It 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).
Last week, the Settlement Administrator mailed notification postcards to eligible borrowers, and State Attorneys General will be mailing packets containing a claim form, instructions and answers to Frequently Asked Questions through the middle of October.
Eligible borrowers are urged to complete their claim forms and return them as soon as possible, or file them online at www.NationalMortgageSettlement.com. The deadline to file a claim for the National Foreclosure Settlement is January 18, 2013. Payment checks are expected to be mailed in mid-2013.
What Does the National Mortgage Foreclosure Settlement Provide?
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.
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. The Settlement Administrator will send claim forms to persons eligible for this cash restitution.
How Much Will Money Will I Get from the National Mortgage Foreclosure Settlement?
You may be eligible to receive a payment of at least $840 from the National Mortgage Settlement. This estimated payment amount is based on 100% of all eligible borrowers submitting Claim Forms, and therefore the payment you receive will very likely be higher. Borrowers who receive payments will not have to release any claims and will be free to seek additional relief in the courts. Borrowers may also be eligible for a separate restitution process administered by the federal banking regulators.
How Do I Know if I’m Eligible for Payment as a Foreclosure Victim?
You are eligible to file a claim for the Nation Foreclosure Settlement if you meet the following requirements:
* Your loan went to foreclosure sale between January 1, 2008 and December 31, 2011.
* The loan was serviced by one of the five mortgage servicers participating in the settlement.
* The borrower made at least three payments on the loan.
* The borrower lived in or intended to live in the property at the time of origination of the loan.
* The property was a one-to-four unit residential property.
* The unpaid principal balance of the first-lien mortgage loan did not exceed $729,750 for a one-unit property; $934,200 for a two-unit property; $1,129,250 for a three-unit property; or $1,403,400 for a four-unit property.
Settlement Notice postcards and Claim Form packets will be automatically mailed to eligible borrowers through the middle of October. If you did not receive a notice or packet, and believe you are eligible, you may contact the Settlement Administrator at 1-866-430-8358.
How Do I File a Claim for the National Mortgage Settlement?
The only way to receive a payment of at least $840 cash from the settlement is to file a Claim Form by the deadline of January 18, 2013. Claim Forms can be mailed to the Settlement Administrator or filed online at www.NationalMortgageSettlement.com.
Beware of Scams
Homeowners should be on high alert for settlement-related scams. Do not provide personal information or pay anyone who calls or emails claiming that they are providing settlement-related assistance. You should not need to pay anyone to file your claim.
If you need help filing your claim, contact the Settlement Administrator at 1-866-430-8358 Monday through Friday from 5 a.m. to 5 p.m. PT, or check out the Frequently Asked Questions section of the National Foreclosure Settlement website at www.NationalMortgageSettlement.com.
Updated June 12th, 2013
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Please note: Top Class Actions is not a settlement administrator or law firm. Top Class Actions is a legal news source that reports on class action lawsuits, class action settlements, drug injury lawsuits and product liability lawsuits. Top Class Actions does not process claims and we cannot advise you on the status of any class action settlement claim. You must contact the settlement administrator or your attorney for any updates regarding your claim status, claim form or questions about when payments are expected to be mailed out.
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