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Historic National Mortgage Settlement Approved
By Kimberly Mirando
UPDATE: Details on how to file a claim for the National Mortgage Foreclosure Settlement have arrived!
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.
Updated October 4th, 2012
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14 thoughts onHistoric National Mortgage Settlement Approved
Do you know that the amount of Subprime loans only amounted to 600 million in the U.S. when the meltdown happened? When in comparison to all other U.S. loans that amounted to 10 trillion so blaming the Subprime poor guys trying to buy a home is just plan uneducated. Today, now almost 6 years after the financial crisis began in 2007, it’s clear that a massive overhaul of the financial industry’s regulatory system is needed.
The Subprime concept began in 1970 in Orange County, CA. The houses were going up 50%, so, it was literally Disneyland to fuel the Southern California growth at that time. To say that this mess is over the Subprime lending is just something that many say when they don’t have a clue looking for blame. Research how much the CFO of Countrywide David Sambol along with the CEO Angelo Mozilo made! Then, you will know where your future went.
Begin by watching American Greed on CNBC. The CEO’s trying to screw us all again while the people continue to find blame. That’s what they want us to do…..Who is going to make the banks accountable for the latest court ruling? If anyone signs a paper for 1,500 to 2,000 after it has been proven that banks farmed out your mortgage documentation to steel your home in fraud foreclosure proceeding, then well…..
American Greed. The CEO’s trying to screw us all again while the people continue to find blame. Who is going to make the banks accountable for this fantasy? If anyone signs a paper for 1,500 to 2,000 after it has been proven that banks farmed out your mortgage documentation to steel your home in fraud foreclosure proceeding, then well…..
If you’re waiting for BOA to lower the principle of your home, stand in line, you might be dead by the time they get to you. Remember what Thomas Jefferson said about the banks. “Beware of the Banks, For They Will Be Worse Than Standing Army’s.
who can I get a hold of to be part if this lawsuit I am going through this right now. Just finished the trial period and was then told I want qualified. I am going to loose my house.help
Looking forward to pay day with Bank of America jerks!
Two and one-half years of stress, putting our home into foreclosure twice, now bad credit, lost our car back to the dealer. All because they forced hazard insurance on us that never excisted, excelerated it 10x going rate and diverted all our mortgage payment we were current on to pay for their insurance. Robo signing on a runaway train straight into the foreclosure. People support your local credit union they are owned by their members you and me. Forget the government. This is just the tip of the financial iceberg…..
Well! Twenty-five billion settlement? Sounds a bit low to me! In any event I still don’t trust these sobs! If I had my way, I’d burn this place down. jsav.
I dealt with Wells Fargo and lost my home, even though I was well able to afford the payments I was lied to about the house condition prior to the sale. Unfortunately, it needed a tremendous amount of work and it took every bit of my money, including my retirement money to keep it afloat. I wrote and explained and called and wrote some more to get payments lowered for months and months, then at the very last minute they said “NO” and forclosed. I lost everything, it was heartbreaking. In the mean time they knew I was putting all this money in to fix everything. I hate them. Hope they go to jail. They were truly horrid to deal with. They knew all along they were going to reposess, just strung me along.
Ocwen Loan Services are they i any way affiliated with any of these banks their just as bad if not worse.
Although my note is serviced by American Home Servicing Inc. It is owned by Bank Of America. Can I take part in this Settlement
It’s a joke that people who endured a fraudulent foreclosure where banks were proven to have falsified, documents, lied, cheated and stole get $1,500 to $2,000 in compensation. They should get their homes back or their fair market value regardless of how much they may have owed. Without punishment bankers and their lawyers will never learn right from wrong.
I sure hope that settlement administrator is not maintained by Wells Fargo themselves….I really dont want to deal with red tape again!