The federal government and attorneys general have announced agreement on a landmark joint state-federal settlement with the nation’s largest loan servicers, including Ally/GMAC, Bank of America, Citi, JPMorgan Chase and Wells Fargo. The Settlement, estimated at $25 billion, will provide payments to distressed homeowners and to both the federal government and individual states. It is the largest multistate settlement since the Tobacco Settlement in 1998.
The settlement provides assistance for homeowners in need of loan modifications; borrowers who are current in their payments but “underwater;” and borrowers who have already lost their homes through foreclosure. The Settlement requires servicers to work off up to $17 billion in loan modifications and up to $3 billion in refinancing relief. $1.5 billion is earmarked for payments to foreclosed borrowers.
But don’t look for any immediate relief. Negotiations to settle on an administrator to handle the settlement will likely take up to 60 days. Then it will take from six to nine months to identify who may be eligible. Those in line for relief will then receive such notification. The actual payouts will take up to three years.
Here are some links where detailed information can be found:
News: Read the national news release and find links to your state Attorney General’s Web site for state-specific news.
About the Settlement: Learn about the settlement, who is affected and what claims may still be pursued against the banks. Find links to your state Attorney General’s Office to find state-specific information and contacts.
Help for Borrowers: Learn how to find out if your loan is affected by this settlement, the timeline for relief, how you will know if you are eligible. Find links to your state Attorney General’s Office to find state-specific information and contacts.
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