orty states, including Michigan, recently won a multi-billion dollar nationwide settlement with five of the nation's largest banks/mortgage servicers, in response to allegations of faulty foreclosure processes and poor servicing of mortgages.
This landmark settlement included the following banks/servicers: Bank of America, Citigroup, J.P. Morgan Chase, Wells Fargo, and GMAC/Ally. Michigan residents will receive approximately a half-billion dollars, including a $101 million fund provided directly to the State of Michigan.
The settlement is the second-largest financial recovery for harmed Michigan homeowners. The largest financial recovery came in 1998 from the Master Tobacco Settlement.
The half billion dollar settlement provides badly needed relief to borrowers who are struggling to avoid foreclosure. It also helps fix a badly broken mortgage servicing system with new guidelines and standards of practice.
How Will The Money Be Spent
A portion of the total half-billion anticipated to benefit Michigan citizens affected by foreclosure will be disbursed in three different areas.
There is also a proposal by Attorney General Schuette to create the Michigan Homeowner Protection Fund, with the $101 million of the half-billion anticipated to come directly to the State of Michigan via the legislature.
How Can You Benefit?
The settlement is with the following lenders/servicers: Bank of America, Citigroup, J.P. Morgan Chase, Wells Fargo, and GMAC Mortgage which is now Ally.
If you have a loan or previously had a loan with one of these companies then you may be eligible to participate in the settlement. I strongly recommend that you contact your mortgage company/servicer’s customer service department and ask if you are eligible.
You must have a loan that was owned and serviced by the lender. FHA and VA loans are ineligible. Be sure that your mortgage company/servicer has your updated contact information. They are required to send out notices to all of their eligible customers via registered mail.
If you receive a letter, respond immediately. You can contact your lender’s customer service department or make contact via their website.
Consumers with mortgage lending services with the affected banks will be provided with toll-free hotlines for more information about the settlement, once the agreement is formally approved. To become effective, the agreement must be submitted to a federal judge for final approval.
Please feel free to contact me via email at firstname.lastname@example.org with any of your real estate questions or comments.