Five of the nations largest mortgage loan services: Ally/GMAC, Bank Of America, Citi, JPMorgan Chase, and Wells Fargo were finally held accountable by the fifty (50) State Attorney General's of this country and have agreed to a settlement in the amount of $25 billion for their fraudulent and deceptive mortgage practices. Connecticut will receive $120 million for homeowners affected.
What does that mean for you a homeowner whose home is undervalued, or who has lost their job and can't make their mortgage payment each month or has not made their mortgage payment in many months? Read on...
The Key provisions of the settlement...
1. The immediate aid to homeowners needing loan modification now which includes first and second lien principal reduction. The services are required to to work off up to $17 billion in principal reduction and the forms of loan modification.
2. The immediate aid to borrowers who are current, but underwater: Borrower will be able to refinance at today's historically low interest rates. Sevicers will have to provide up to $3 billion in refinancing relief nationwide, $36 million of which will go to Connecticut homeowners.
3. Immediate payment to borrowers who lost their homes to foreclosures with no requirement to prove financial harm and without having to release private claims against the servicers or in the OCC review process. More than 7,500 Connecticut borrowers who lost their home to foreclosure from January 1, 2008 through December 31, 2011 and suffered servicing abuse would qualify for an estimate $1,500 in each payment to individual borrowers.
4. Immediate payment to signing states to help fund consumer protection and state foreclosure protection efforts. Connecticut will receive $27 million to help pay for local foreclosure prevention programs, such as CT Dept of Bankking foreclsure prevention hotline, HUD-approved housing counselors, the Judicial Branch's foreclsoure meidation program, non-profit legal aid groups that help homeowners facing foreclsoure and loan modification programs supported by the Connectiuct Housing Finance Authority.
There are two historic reforms coming out of this settlement. First ever nationwide reforms to servicing standards and state Attorneys General oversight of national banks. This is something that no other federal or state agency has been able to acheive.
If the banks do not comply or miss deadlines, they will have to pay heavy penalties. This is a of Servicing Standards and Requirement for all national banks to regularly report compliance with the settlement to an independent outside monitoring company that reports to the state attorney general. If they are not compliant they will pay heavy penalties.
Finally...they are being held accountable for their fradulent practices and inadequate level of staffing and training, their poor communication with borrowers, improper fees, dual tracking foreclosures, to just naem a few.
The banks will still be accountable for other claims not covered by this settlement, especially for their wrong doing with robo-signing. Which in essence is a practice where the banks would hire an employee whose only job was to fraudulently sign the name of a bank vice president or executive on documents dealing with foreclosures to cover for lost paperwork, among other documentation needed for foreclsoure proceedings.
Over the next thirty days the attorneys general will begin working with a settlement monitor who will oversee the mortgagor sevicers compliance with the settlement.
Next six to nine months a settlement administrator selected by the attorney general will work to identify homeowners eligible for the immediate cash payments. Those eligible will receive letter and claim forms.
This settlement will be executed over the next three years. Because of the complexity of the mortgage market and this agreement time period, borrowers will not immediately know if they are eligible.
Borrowers may contact their banks directly or call the following toll-free numbers for more information:
Bank of America: 877-488-7814, Citi: 866-272-4749, Chase: 866-372-6901, Ally/GMAC: 800-766-4622, Wells Fargo: 800-288-3212
Please note that this settlement does not cover those loans owned by Fannie Mae or Freddie Mac. To find out if your loan is owned by Freddie Mac or Fannie Mae go to: www.fanniemae.com/homeaffordable or www.freddiemac.com/avoidforeclosure
If you have any other questions please call a Realtor who is a Short Sale and Foreclosure specialist, certified in that area. They will be better educated to help you.
ALWAYS THERE FOR YOU!
Camille Taylor
CRB,SFR,GRI
Short Sale & Foreclosure Specialist