The historic Robo-Signing Settlement reached between the U.S. government and five major lenders recently will provide help for many homeowners in distress with their mortgages.
April’s special report provides answers to these questions:
- What is robo-signing?
- Which banks are involved?
- How much money is the settlement worth?
- Who is eligible to benefit from the settlement money?
What is Robo-Signing?
During the height of the foreclosure crisis, some banks fraudulently processed and approved foreclosures because they had more than they were equipped to handle properly. They automated the signing process, forging signatures of bank officials in order to complete the foreclosure.
Which Banks Were Involved?
Five national banks were involved in the settlement:
- Bank of America
- JP Morgan Chase
- Wells Fargo
- Ally Financial/GMAC
Additionally, nine smaller banks may be included in the agreement as it is fully implemented.
How Much Money is the Settlement Worth?
The total settlement was $25 billion. It was split up in the following ways:
- $5 billion consisting of $2,000 payments to borrowers foreclosed on between 1/1/08 and 12/31/11
- $10 billion to borrowers currently delinquent on their mortgages, to be used for loan modifications or other foreclosure alternatives.
- $3 billion for borrowers who are currently underwater (owe more than the home is worth), to help refinance the loans.
- $7 billion to assist homeowners through short sales, forbearance, relocation assistance or other foreclosure alternatives.
The money will be distributed by state attorneys general offices and varies on a state-by-state basis.
California will receive the most money from the settlement–over $12 billion.
Oklahoma was the only state that did not sign on to the agreement, reaching its own settlement of $18.5 million.
Who is Eligible?
To be eligible for the $2,000 payment, your home must have been foreclosed between 1/1/08 and 12/31/11. All other eligibility requirements depend on factors which vary from state-to-state.
Once an administrator is selected to handle logistics and monitor compliance, during the following 6-9 months the settlement administrator and attorneys general will identify homeowners eligible for cash payments and notify them by mail. It is estimated that the settlement will be completed within three years.
One of the Most Important Things to Know
The sooner help is sought, the more options are available, and the greater chance of success.
As a real estate professional who has earned the Certified Distressed Property Expert (CDPE) designation, my mission is to provide financially strapped homeowners with alternatives to foreclosure, help them steer clear of scams, and assist them in finding the solution that best meets their needs.
These are tough times, but more help is available than ever before. If you or someone you care about is ready to navigate away from the dark cloud of an unmanageable mortgage, contact me today and let’s get started.