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02/15/12

Historic Mortgage Servicing Settlement

 

On February 9, 2012, the federal government and 49 state attorneys general announced that they have reached a $25 billion agreement with the nation’s five largest mortgage servicers to address mortgage loan servicing and foreclosure abuses.  The agreement will provide financial relief to many homeowners and establishes significant new homeowner protections for the future. 

Under the terms of the settlement, these five mortgage loan servicers - Bank of America Corporation, JPMorgan Chase & Co., Wells Fargo & Company, Citigroup Inc., and Ally Financial Inc. (formerly GMAC) - are required to commit $20 billion to reduce principal for borrowers who, as of the date of the settlement, are either delinquent or at imminent risk of default and who owe more on their mortgage than their homes are worth (are “underwater”).  They are also required to refinance loans for eligible underwater borrowers who are current on their mortgages. The settlement also includes additional monies for a borrower payment fund to provide cash payments to borrowers whose homes were sold or taken in foreclosure between Jan. 1, 2008 and Dec. 31, 2011, and who meet other criteria.

If you have, or had, a mortgage loan with one of these five servicers, and your loan is not owned by an investor like Freddie Mac or Fannie Mae, you may be eligible to get help from the settlement.  As of Feb. 15, 2012, the processes for determining eligibility and claiming compensation are not yet finalized.  Any homeowner who receives a call or letter promising access to compensation from this settlement must BEWARE of SCAMS. Confirm that the offer is truly legitimate and not a fake offer from someone trying to scam you by promising you access to the settlement.

Working with your servicer to access the settlement is FREE.  Housing counseling to assist you in this process is FREE. Do not pay money or sign over title to your house to any individual or company claiming to offer you assistance.  Beware of anyone who wants payment in exchange for providing access to this settlement, or any other foreclosure assistance program.

For more information on the settlement, click here.     

To determine if your loan is owned by Freddie Mac or Fannie Mae, click on their respective names to look up your loan.

To locate a HUD-approved housing counseling agency that can assist you for FREE, click here, or call the Homeowners’ HOPE hotline, at 1-888-995-HOPE.

 

For a list of warning signs and ways you can avoid loan scams, click here.

For 6 Things You Should Know to Spot and Avoid Scams, click here.