The Obama Administration is committed to ensuring that everyone in the mortgage process-banks, mortgage servicers, and other institutions-are following the law. If they’ve not followed the law they should be held accountable. Banks and mortgage services expect that homeowners will meet their obligations under a mortgage; American homeowners should have the same expectation that banks and mortgage servicers meet all of their responsibilities. And it is our job in the federal government and in state and local government to make sure that they do. In meeting that obligation, the Obama Administration has coordinated the reviews and investigations conducted by a broad range of federal agencies and with the 50 state attorneys general to reach a servicing settlement agreement with lenders who have violated state and federal law and Americans’ trust.
Who May be Eligible for Assistance
Because of the complexity of the mortgage market and this agreement, which will be performed over a three-year period, borrowers will not immediately know if they are eligible for relief. Borrowers from states who did not sign the settlement will not be eligible for any of the relief directly to homeowners. Borrowers from Oklahoma will not be eligible for any of the relief directly to homeowners because Oklahoma elected not to join the settlement.
The settlement provides assistance for:
Homeowners needing loan modifications now, including first and second lien principal reduction. The servicers are required to work off up to $17 billion in principal reduction and other forms of loan modification relief nationwide.
State attorneys general anticipate the settlement’s requirement for principal reduction will show other lenders that principal reduction is one effective tool in combating foreclosure and that it will not lead to widespread defaults by borrowers who really can afford to pay.
Borrowers who are current, but underwater. Borrowers will be able to refinance at today’s historically low interest rates. Servicers will have to provide up to $3 billion in refinancing relief nationwide.
Borrowers who lost their homes to foreclosure with no requirement to prove financial harm and without having to release private claims against the servicers or the right to participate in the OCC review process. $1.5 billion will be distributed nationwide to some 750,000 borrowers.
Over the next 30 to 60 days, settlement negotiators will be selecting an administrator to handle the logistics of the settlement and monitor compliance.
Over the next 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.
This settlement will be executed over the next three years.
WHERE YOU CAN GO FOR HELP
For loan modifications and refinance options, borrowers may be contacted directly by one of the five participating mortgage servicers. Keeping in mind the timeline above, you may contact the banks directly if you need additional information:
Bank of America: 877-488-7814 (Available M-F 7am – 9pm CT and Saturdays 8am CT – 5pm CT
JPMorgan Chase: 866-372-6901
Wells Fargo: 800-288-3212 (Available M-F 7 a.m. to 7 p.m. CST)
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:
These sites will also include links to information about mortgage and foreclosure programs you may be eligible to access. You may also call 1-888-995-HOPE (4673)
For borrowers who lost their home to foreclosure between Jan. 1, 2008 and Dec. 31, 2011, a settlement administrator designated by the attorneys general will send claim forms to persons eligible for cash restitution.
If you believe you are eligible for relief under this settlement but are concerned you will be difficult to locate, please contact your Attorney General’s Office. We will collect and forward your information to the appropriate person to ensure you are contacted if you are eligible.
Scammers are already at work trying to capitalize on the national mortgage settlement to access your personal information–or worse, your money. The Attorneys General have already received reports of scammers in Alabama calling borrowers claiming to be one of the major banks involved in this settlement and offering a cash payment to consumers if they simply provide the routing number to access their bank account. If you receive an unsolicited call from one of the major banks, you can identify a scam in several ways:
Does the caller identify themselves as representing your loan servicer? Or do they ask you to provide the name of your loan servicer? If they ask you for the name of your servicer, they may be a scammer.
Does the caller offer to provide your personal information to assist you in identifying your account? Or do they ask you to provide that? If the caller is from your loan servicer, they will be able to tell YOU your personal information because they will have it. You should never provide your personal information (including bank account numbers, social security numbers, etc.) to an unsolicited caller–no matter what they promise you.
Does the caller offer to speed your settlement relief for a fee? They are definitely a scammer! Neither the banks nor the Attorneys General will charge a fee to speed your settlement.
If you think the caller may be legitimate, ask for their contact information, tell them you are going to call your bank’s hotline (located above) and confirm, then call them back. Chances are if they’re a scammer, they won’t want you to check on them and they won’t provide their contact information.