A coalition of State Attorneys General and several federal agencies have negotiated a settlement intended to provide $25 billion dollars in relief to distressed borrowers. The agreement settles several investigations into the mortgage loan practices of the five (5) largest loan servicers, Bank of America, GMAC/ALLY, Wells Fargo, JP Morgan Chase and Citibank.
Who may be eligible for the National Mortgage Settlement is not known at this time, but beneficiaries must be a resident of a state that is a party to the settlement. The assistance will benefit the following types of borrowers: 1. Homeowners who are currently in need of a modification; 2. Borrowers who are current with their payments, but are underwater due to declining property values; and 3. Borrowers who have lost their homes to foreclosure, with no requirement to prove financial harm.
Ohio is a participant in the settlement agreement. Ohio Attorney General Mike DeWine has provided extensive information on his web site to address the settlement, to answer frequently asked questions and to highlight terms of the settlement agreement. The Ohio AG also provides a link to an executive summary.
The current timeline for the settlement process calls for the selection of an Administrator to monitor compliance within the next 30 – 60 days. During the next 6-9 months, the appointed Settlement Administrator, the Attorneys General and Mortgage Servicers will work to identify homeowners who are eligible for cash payments and/or principal reduction. They will also identify those borrowers who lost their homes to the foreclosure process during the period of January 1, 2008 to December 31, 2011. Claim forms will be sent to those persons eligible for restitution.
If you believe you are eligible for relief and are not contacted, it is a good suggested that you contact your lender or servicer directly. You may find links to the web sites of the participating lenders/servicers and phone numbers in this blog post.
Bank of America: 877-488-7814
JPMorgan Chase: 866-372-6901
Wells Fargo: 800-288-3212
Michael P. Dansack, Jr.