Homeowners Who Lost Homes to Foreclosure May Be Eligible for Settlement Payments

Claims forms are being sent to 2 million borrowers nationwide

If you lost your home to foreclosure between January 1, 2008 and December 31, 2011, you may be eligible for a settlement payment under the $25 billion national mortgage foreclosure settlement.

Eligible borrowers had mortgages serviced by Ally/GMAC, Bank of America, Citi, JPMorgan Chase and Wells Fargo, the servicers that agreed to the settlement with the federal government and attorneys general of 49 states and the District of Columbia.

The settlement earmarked approximately $1.5 billion in payments for 2 million borrowers nationwide. The actual payment amount will depend upon the total number of borrowers who decide to participate. Payment checks are expected to be mailed in mid-2013.

Last week, the national settlement administrator mailed notification postcards to eligible borrowers across the nation. Eligible borrowers should complete the claim form and return it as soon as possible in the envelope provided, or file the claim form online at www.nationalmortgagesettlement.com. The deadline for all claims is January 18, 2013.

Simple to complete

The claim forms are simple to complete. Borrowers who have questions or need help filing a claim should contact the settlement administrator, toll-free, at 866-430-8358, or send questions by email to administrator@nationalmortgagesettlement.com. The information line is staffed Monday through Friday from 8 a.m. to 8 p.m. EST.

Eligible borrowers do not need to prove financial harm to receive a payment, nor do they give up their rights to pursue a lawsuit against their mortgage servicer or to participate in the Independent Foreclosure Review Process being conducted by federal bank regulators. More information about that program is available at www.independentforeclosurereview.com.

Eligible borrowers may receive payment from this settlement even if they participate in another foreclosure claims process. However, any payment received may reduce payments that a borrower may be eligible to receive in any other foreclosure claim process or legal proceeding.

Borrowers who believe they may qualify for a payment, but did not receive a notice because they have moved, should contact the settlement administrator, toll-free, at 866-430-8358, or send an updated address by email to administrator@nationalmortgagesettlement.com. The line is staffed Monday through Friday from 5 a.m. to 5 p.m. PST.

Watch for scams

Officials are warning all homeowners to be aware of settlement-related scams. Do not provide personal information or pay money to anyone who calls or emails and claims to provide settlement-related assistance. The offical claim form does not ask for personal financial information. 

The national settlement followed state and federal investigations, which alleged that the five mortgage servicers routinely signed foreclosure-related documents outside the presence of a notary public and without personal knowledge that the facts contained in the documents were correct. This civil law enforcement action also alleged that the servicers committed widespread errors and abuses in their foreclosure processes.

The settlement resulted in broad reform of the mortgage servicing process, as well as financial relief for borrowers who are still in their homes via direct loan modification relief, including principal reduction.

Story provided by ConsumerAffairs.
Consumer Affairs

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