This $25 billion national settlement makes the mortgage services pay for wrongdoing, provides real financial help for homeowners, and requires mortgage servicers to treat homeowners fairly.
Itís the result of a years-long effort by state attorneys general to hold the five largest mortgage servicers accountable for their misconduct and mistreatment of homeowners.
Financial relief for homeowners
Homeowners will get at least $17 billion and likely as much as $32 billion in direct loan modification relief, including principal reduction.
This relief will help many homeowners avoid foreclosure and stay in their homes with affordable payments.
Many homeowners whose mortgages exceed the value of their homes can tap into a fund of $3 billion to refinance their mortgages.
$5 billion will go to the states and federal government ($4.25 billion to states and $750 million to the federal government) and will be used to fund housing counselors, legal aid, and other assistance for homeowners, including cash payments for borrowers who experienced servicing abuse.
To see if you may qualify, please call your loan servicer:
Bank of America: 877-488-7814
Wells Fargo: 1-800-288-3212
Borrower Payment Program
The national settlement administrator has begun mailing payment claim forms to thousands of Connecticut borrowers whose homes were lost to foreclosure between Jan. 1, 2008 and Dec. 31, 2011. The packets containing a letter from the Attorney General, claim forms, instructions and other explanatory information are being mailed to eligible borrowers in Connecticut.
Borrowers who believe they are eligible, but do not receive a notification by October 22, 2012 should e-mail email@example.com or call a toll-free number: 1-866-430-8358. The same contacts may be used by borrowers who have questions or need help filing their claim. The information line is open Monday through Friday from 8 a.m. to 8 p.m. ET.
Treating homeowners fairly
Stops many past foreclosure abuses, such as robo-signing, improper documentation and lost paperwork with new, enforceable mortgage servicing standards.
Requires strict oversight of foreclosure processing.
Mortgages servicers will have to evaluate homeowners for other loan mitigation options first, making foreclosures a last resort.
Restricts banks from foreclosing while the homeowner is being considered for a loan modification
Sets procedures and timelines for reviewing loan modification applications, and gives homeowners the right to appeal denials.
Creates a single point of contact for borrowers seeking information about their loans and adequate staff to handle calls.
These tough new standards will be enforced by court order and overseen by an independent monitor.