Eligible Hoosiers May Receive Mortgage Settlement Money
The Indiana Attorney General Greg Zoeller announced that eligible borrowers who lost their homes to foreclosure will soon receive claim forms to submit for payment under the national mortgage settlement.
Eligible homeowners must have had loans serviced by Ally/GMAC, Bank of America, Citi Bank, JP Morgan Chase or Wells Fargo and lost their homes either through sheriff sale, short sale or deed in lieu of foreclosure. Depending upon the number of eligible participants, the amount payable to these borrowers will be about $840 per eligible household.
In February, Indiana was one of 49 states to join in the federal government’s settlement with the nation’s five major mortgage lending banks and servicing institutions for allegations of robosigning. As part of the settlement, Indiana’s homeowners who were foreclosed upon and experienced a servicer error between Jan. 1, 2008 and Dec. 31, 2011 will receive payment.
Consumers who believe they are eligible but do not receive a postcard or claim packet can call the settlement administrator’s hotline toll-free at 1-866-430-8358. The hotline is staffed Monday through Friday from 7 a.m. to 7 p.m. Central. Borrowers who have questions or need help filing their claim can also contact the settlement administrator at the toll-free number or send questions by email to email@example.com.
Eligible borrowers may get a payment from this settlement even if they participate in another foreclosure claims process. However, any payment received may reduce payments borrowers may be eligible to receive in any other foreclosure claim process or legal proceeding.
Zoeller warns consumers that scammers may try to contact them and offer assistance in obtaining payment from the settlement for a fee. There is no cost to eligible borrowers to participate in this settlement and consumers should not provide any personal or financial information to the solicitor. If you think you might be a victim of a scam please file a complaint with the Attorney General’s Office by visiting www.IndianaConsumer.com or by calling 1-800-382-5516.
Q: What is a mortgage servicer and how do I know who services my loan?
A: A mortgage servicer administers mortgage loans, including collecting and recording payments from borrowers. A servicer also handles loan defaults and foreclosures, and may offer loss mitigation programs to assist delinquent borrowers.
The company that you make your monthly payment to is your mortgage servicer. Your mortgage servicer may or may not be a lending institution and may or may not own your loan. Many of the loans administered by servicers are owned by third-party investors.
This settlement involves the nation’s five largest mortgage servicers and you may reach them at the Web sites and phone numbers below:
- Ally/GMAC: 800-766-4622
- Bank of America: 877-488-7814
- Citi: 866-272-4749
- JPMorgan Chase: 866-372-6901
- Wells Fargo: 800-288-3212
Loans owned by Fannie Mae or Freddie Mac are not impacted by this settlement. You may visit the following websites to learn if your loan is owned by either Fannie Mae or Freddie Mac:
Q: How will I know whether this settlement affects my situation?
A: Because of the complexity of the mortgage market and this agreement, which will be performed over a three year period, borrowers from the settlement states will not immediately know if they are eligible for relief.
For loan modifications and refinance options, borrowers may be contacted directly by one of the five participating mortgage servicers.
For borrowers who lost their home to foreclosure between Jan. 1, 2008 and Dec. 31, 2011, the National Mortgage Settlement Administrator will mail Notice Letters and Claim Forms in late September through early October 2012 to those borrowers who lost their home due to foreclosure between January 1, 2008 and December 31 2011 and whose loans were serviced by one of the five mortgage servicers that are parties to the settlement. Borrowers who receive payments will not have to release any claims and will be free to seek additional relief in the courts. You can contact the National Mortgage Settlement Administrator at 1-866-430-8358.
More information will be made available as the settlement programs are implemented. For more information on the proposed agreement:
Q: Will there be payments to foreclosure victims?
A: Yes. Approximately $1.5 billion of the settlement funds will be allocated to compensation to borrowers who were foreclosed on after January 1, 2008 and before Dec. 31, 2011. The National Mortgage Settlement Administrator will mail Notice Letters and Claim Forms in late September through early October 2012 to those borrowers who lost their home due to foreclosure between January 1, 2008 and December 31 2011 and whose loans were serviced by one of the five mortgage servicers that are parties to the settlement. You may be eligible to receive a payment of at least $840.00 as part of the National Mortgage Settlement. This estimated payment amount is based on 100% of all eligible borrowers submitting claim forms, and therefore the payment you receive will very likely be higher. Borrowers who receive payments will not have to release any claims and will be free to seek additional relief in the courts. Borrowers may also be eligible for a separate restitution process administered by the federal banking regulators. You can contact the National Mortgage Settlement Administrator at 1-866-430-8358.
Q: How do I know if I am eligible for payment as a foreclosure victim?
A: You are eligible if you meet the following requirements:
- Your loan went to foreclosure sale between January 1, 2008 and December 31, 2011.
- The loan was serviced by one of the five mortgage servicers participating in the settlement.
- The borrower made at least three payments on the loan.
- The borrower lived in or intended to live in the property at the time of origination of the loan.
- The property was a one-to-four unit residential property.
- The unpaid principal balance of the first-lien mortgage loan did not exceed $729,750 for a one-unit property; $934,200 for a two-unit property; $1,129,250 for a three-unit property; or $1,403,400 for a four-unit property.
Q: What about those of us who keep making our mortgage payments?
A: Borrowers who are current in their payments but are “underwater” on their mortgages may qualify for refinancing relief under the settlement.
Beyond that, the mortgage servicers involved in this settlement broke the law, the conduct harmed borrowers, and this settlement addresses that conduct. If the mortgage servicers followed the law, many foreclosures likely could have been prevented. Foreclosure has a profound impact beyond the borrower and the creditor. A foreclosure affects homeowners, families, neighborhoods, communities, the housing market and our overall economy.
When a house is subject to foreclosure, it creates a ripple effect that lowers the value of nearby single-family homes and other properties. In 2009 the Center for Responsible Lending projected that homeowners living near foreclosed properties, on average, would lose $7,200 in property value, and projected a four-year increase in losses to $20,300 per household.
Foreclosures contribute to unstable family and social environments. They increase stress on homeowners, their families and their neighbors. These deteriorating, neglected properties and neighboring property value losses create neighborhood blight, cut a community’s tax base, and can contribute to crime. Displaced homeowners put other stresses on communities, including the need for shelter and social services.
Foreclosures affect everyone and affect our economy – even those who play by the rules and pay their monthly mortgage on time.
Q: Will taxpayers ultimately pay for this settlement?
A: No, the settlement is not funded by taxpayers.
Q: If I have not yet been foreclosed, do I have to live in the house to be eligible for the Consumer Relief portion of the settlement?
A: No. To qualify for the Consumer Relief portion of the settlement, the home must be occupied but there is no requirement that the owner of the home be the occupant. This is different from past settlements.
Q: How will this settlement protect consumers in the future?
A: The banks have agreed to major reforms in how they service mortgage loans. These new servicing standards require lenders and servicers to adhere to a long list of rights for those facing foreclosure. For example, borrowers will have the right to see all of their loan documents to make sure any potential foreclosure is legal; they will be given every opportunity to first modify their loan before facing foreclosure; lenders and servicers will be required to have an appropriate number of well-trained staff members to promptly respond to the needs of distressed borrowers; and finally, borrowers will have the right to deal with a reliable, single point of contact so they have access to a person from whom to obtain information throughout the process. This is very important because, throughout the foreclosure crisis, borrowers have lodged widespread complaints about their frustrations in trying to work with their lenders. They’ve complained about unresponsive employees, lost documents, and conflicting information.