Five Big Banks Reach National Settlement for Struggling Homeowners
Last week 49 states (Oklahoma is the hold out) reached a settlement with the five biggest loan servicers in the US as the lengthy investigation into Robo Signing and the housing bust continues. Here’s the quick and dirty on what the settlement means for those of you currently facing mortgage problems, those of you who might in the future, and even those who have already been foreclosed on.
- Bank of America
- JPMorgan Chase
- Wells Fargo
- Ally Financial/GMAC
Note: If your loan was owned by Freddie Mac or Fannie Mae, you do NOT qualify under this settlement.
Those currently facing loan modification: may offer first and second lien principal reduction
Those who are current on their mortgages, but who’s mortgages currently exceed the property value: you should be able to refinance at today’s interest rates
If you were foreclosed on: you might be eligible for a lump-sum one-time payment of $2,000
How It Will Change Foreclosures in the Future:
“These servicing standards require single point of contact, adequate staffing levels and training, better communication with borrowers, and appropriate standards for executing documents in foreclosure cases, ending improper fees, and ending dual-track foreclosures for many loans.”
The banks have 3 years from the settlement to execute any relief they’re responsible for. However, the guidelines look like this:
- 30 to 60 days, select an administrator to handle the logistics of the settlement and monitor compliance.
- Six to Nine months, the settlement administrator, attorneys general and the mortgage servicers will work to identify homeowners eligible for the immediate cash payments, principal reductions and refinancing. Those eligible will receive letters.