$25 Billion Settlement For Mortgage Relief: Will You Qualify?

The government's $25 billion settlement with five of the nation's largest banks could help up to one million homeowners. About $21.5 billion is earmarked for consumer relief, with the remainder going to state and federal governments.

Distressed homeowners should not expect a check or aid tomorrow, however. According to the government's National Mortgage Settlement website, it will take up to two months to select an administrator to oversee the process, identifying who is eligible to receive help, and six to nine months to start with the actual housing help.

Help could come via partial loan forgiveness or "principal reduction," refinancing or, cash payments of up to $2,000 for those who have already lost their home.

The program only applies to homeowners who have or had mortgages serviced by Bank of America, Citigroup, JPMorgan Chase, Wells Fargo and Ally Financial. Those with loans owned by housing giants Fannie Mae or Freddie Mac are not affected by settlement. Homeowners from Oklahoma, the only state to not sign the settlement agreement, are not eligible.

Here's more detail on who's eligible for relief:

Principal reductions Servicers are required to provide at least $17 billion worth of direct relief to current homeowners, most of which will go to provide help for principal reduction for first and second mortgages. Other money will be used to facilitate short sales--where the home is sold for less than the mortgage value. The funds also cover anti-blight measures, and enhanced homeowner transition programs. Principal reductions could be anywhere from $20,000 to $50,000 on average but the amount will depend on each homeowner's market. Homeowners who think they qualify should contact their lender directly.

Who is eligible? Homeowners who are still in their home, but are not current on their payments and are struggling to make them.

Refinancing Servicers will have to provide up to $3 billion in refinancing relief nationwide to help homeowners get better interest rates on home loans to reduce monthly payments. Current rates for 30-year and 15-year fixed rate mortgages are under 4 percent.

Who is eligible? Homeowners who owe more on their home than it is worth and are current on their mortgage payments.

Cash Servicers will divvy up $1.5 billion among 750,000 homeowners who have already lost their homes to foreclosure. That comes out to $2,000 and checks will be mailed over the next six to nine months.

Who is eligible? Homeowners who lost their homes to foreclosure between Jan. 1, 2008 and Dec. 31, 2011. For homeowners who lost their house but are concerned it could be difficult for the administrator to track you down, please contact an Attorney General's Office.

For more information:

• 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

Comments

[Dvel59]

01:05 PM on 08/16/2012

we got behind last yr do to medical problems, (we only make $50,000 @ yr) but we make the house payment ( the minimum). we tried to do the mortgage relief program since we were @ month behind for the last yr, and we were told by chase we didnt qualify because we didnt make enough money per yr. and we have to many bills ( which are the same bills we had when we bought the home from Chase almost 5 yrs ago,with just a few more medical bills to pay for.) they told us we should try to send extra money in w/house payment so we wont get behind. WELL IF I HAD EXTRA MONEY TO BEGIN WITH I WOULD NOT HAVE HAD TO APPLY FOR MORTGAGE RELIEF & BE TOLD I DONT HAVE ENOUGH INCOME. I thought that the government bailing chase and the other banks out (which us poor people are paying for now)and sitting up the mortgage relief program was to help the middle class,(the poor working class like us) but found out otherwise. Who is the government really trying to help out besides theirselves & the rich. It's sad and a shame what this country has become.

[mdsman]

07:52 AM on 02/13/2012

"...will go to provide help for principal reduction for first and second mortgages."

Why would we be lowering the principal for those that have taken 2nd mortgages. They used the home equity as an ATM. They are not underwater, they have already taken the profit.

Insanity, greed, selfishness from the "me, me, mine, mine" crowd

[Lochness71]

11:22 AM on 02/13/2012

It is also common to split off a smaller part of the total morgage into a second morgage to avoid PMI.

[shepony]

07:41 AM on 02/13/2012

Let me see...people who have lost their homes to foreclosure due to illegal banking practices will get $2000. Somehow that just doesn't equate, does it.

[mdsman]

07:50 AM on 02/13/2012

Were they in default?

[Lochness71]

11:25 AM on 02/13/2012

Normally they may have had some equity in the house and they could have received if they could have sold the house. With most houses are now under water and that equity is gone.

[kidcat24]

07:38 AM on 02/13/2012

How many of those banks turned the mortgage over to Fannie and Freddie so they could get out of this?

[mdsman]

07:52 AM on 02/13/2012

Hopefully, all of them

[Triniman65]

02:33 AM on 02/13/2012

50 million home owners who either through purchases or refinances paid just 1 point on an average home loan of 150,000 would equal 75 billion. The real question is this. Considering that 3 years ago these same banks were near bankruptcy and had to take loans to stay in business how can they afford a 25 billion settlement. Perhaps its time to start asking more questions instead of just believing everything our gov't says.

[KenGirard]

04:01 PM on 02/13/2012

In Oct 2011, Bank of America reported a $6.7billion dollar profit for the 3rd qrt of 2011.
Most of the others did as well.

[Jesus Chavez1980]

02:05 PM on 02/17/2013

Banks have been able to borrow money from the FED at a rate of near zero. Then they take this same money and buy from the FED securities that pay 2.7 percent. Actually, they buy it through a broker that gets paid a fee by the FED to sell these securities. Yay for the free market.

[luckyone77]

12:29 PM on 02/12/2012

The banks should finance additional tax deduction available to all homeowners, current and foreclosed every year for the next decade to pay for destroying the housing market and the global economy

[Janzee12000]

06:50 PM on 02/11/2012

Who Does Not Qualify For A Piece Of The Mortgage Settlement -----------> You

[kayyy]

04:14 AM on 02/11/2012

It was the congress woman from Michigan or Ohio who advised her constituents to demand proof of mortage owership. When the foreclosures hit really hard the institutions had little or no proof of legitimacy. It was because they could keep not up with the revolving sales of mortages. They had no paper or other legit documentation. Now we're to believe that they've got this sorted out and that those people will actually get the money? HA!

[luckyone77]

12:30 PM on 02/12/2012

americans are waking up to see who the real terrorists are.

[kayyy]

04:07 AM on 02/11/2012

Election coming up your vote could fire somebody and hire somebody.

[kayyy]

03:56 AM on 02/11/2012

Let me get this straight. All the people who qualified for regular loans and were bullied into sub-prime nightmares don't get it. All the people who are making payments on increases pushed on them after contracts were signed don't get it. All the people who went thru the govement and lost their house in Uncle Sam's crash don't get it. O.K. I'm stupid cuz I just don't get it.

[kayyy]

03:48 AM on 02/11/2012

{Cash Servicers will divvy up $1.5 billion among 750,000 homeowners who have already lost their homes to foreclosure. That comes out to $2,000 and checks will be mailed over the next six to nine months.}

Did I read this right? These people will only get 2000.0 per lost home? Wow that sucks.

[mdsman]

07:54 AM on 02/13/2012

Yes, it does.
They didn't pay their mortgage, lived for free while the flawed process took it course and are now being give $2000 of our money.
Why?

[TMS3100]

08:02 AM on 02/13/2012

This was nothing but a shaken down of the lenders by the states. Think tabacco settlement.

[PennyRex]

05:01 AM on 02/19/2013

@mdsman.....its not "our" money (taxpayer), the settlement funds are the BANKS money. You know, the banks that accepted TAXPAYER bailout money.

[Benjamin Bloom]

07:05 PM on 02/16/2013

The amount is not $2,000. The amount is a minimum of $840. I have the paper work. It is also on the website for this settlement.

[Kimberly Hasler]

11:12 PM on 02/10/2012

What??? Those with loans owned by housing giants Fannie Mae or Freddie Mac are not affected by the settlement. What does that mean? Just because our COUNTRYWIDE LOAN was bought out from BOFA mean that we cant get part of this millionss of dollars when these banks ALL SCREWED UP! Anybod that's ever had/has a Countrwided/turned BofA . wells fargo , chasebank, all shoul be consumated, every single one of us'!!! Our home, btw came back way down below in price for 3 bedroom 2 bathroom . In fact...all the money we owed the bank because the times we missed payments they added to the end of our newly, our new 40yr term!! So, I don' want to be told that just because FannieMae is our lender, re we can't get any part ofthat money. The 6 or 7 months of threatening forclosure documents, the dated set to be sold at Auction, and those times I interceededto stop it from happening. Now it's OUR TURN! IT'S OUR TURN FOR THE PAY BACK!

[GetRealSoon]

08:54 PM on 02/10/2012

"The program only applies to homeowners who have or had mortgages serviced by Bank of America, Citigroup, JPMorgan Chase, Wells Fargo and Ally Financial."

Yup, if your loan was serviced by any other you've been left out of the settlement and the foreclosure review.

[castiniron]

08:34 PM on 02/10/2012

What a joke - In short, this deal will give relief to people who took bigger loans than they could afford and those who have stopped paying their mortgage. Meanwhile, folks who continue paying their mortgages on time get nothing. Yes another kick in the behind to those that are carrying the rest - Thanks mr. president and your flunkies.

[reader1]

11:09 PM on 02/10/2012

Trust me, we are all in this together, if you are fortunate enough to pay your mortgage on time, that's great. If you did not lose your job or get one that doesn't pay as well as the one you had when you qualified for the mortgage great. However, stop blaming others because some of the population did not have it a well as others. The system blew up and trust me, we all blew up with it. If we don't fix it, there will be nothing left to fix! Not trying to be disagreeable, I just disagree with your analysis!

[webnova]

12:40 AM on 02/11/2012

Your absolutely Right on "reader1" but ... here is another point. Good ol "casiniron" who says he is being upright and forth-right on paying his mortgage every month might not even know he is not paying on his note and will never ever own his home if he can't find who doesn't own his original bank note. Now I am not even going to explain in detail how this happened but it is happening to 90% of the home owners who have bought their home in the past 20 years. Homeowners are getting screwed and don't even know it or even care.
This is the main reason they have to squash this whole mess by making false promises and making a mess out of a mess. Can you even imagine if the average Joe knew about scrutinizations, mortgage pools and securities. oh my god .... they would hang every banker, politician who voted for this ... Not too mention every attorney general.

[allshewantstodoisdance]

09:49 PM on 02/12/2012

As you mentioned "qualified" = many of the people who did get a house with 100% financing (20% from one bank and 80% from a second bank) were running under the "stated income" clause. I have a worker who 'on paper' was making $9600 a month with his wife. The truth is that TOGETHER, they earned $4000 a month. Clearly they were not going to afford $2200 a month payments with 4 minor children to feed and clothe. The scammy little corner mortgage companies really did alot of fraudulent dance moves to collect their fees and leave home buyers with little to stand on. Same guy had $13,500 as a down payment and the whole bundle got put into fees and points. How many points did he buy down to end up with 8.9% and 10.2% interest rates ? Someone should be tracking them down and re-couping the fraud perpetrated on so many hard-working innocents.

[loki]

07:40 PM on 02/10/2012

well according to the state of Missouri, Universities, private and public will benefit over 100 million from it. Yeah, thats going to really help the ripped off home owners.

and why did Illinois get 1 Billion of the settlement for themselves?