Federal Funds Go To Those Who Lost Homes To Foreclosure
LANSING (CBS Detroit) – There's good news for thousands of Michigan residents who were caught up in the foreclosure crisis that rocked the real estate industry and crimped the overall economy.
Michigan Attorney General Bill Schuette announced Monday checks will go out this week to Michigan borrowers who submitted a valid foreclosure payment claim through the National Mortgage Settlement, which includes about 72,000 people.
Eligible borrowers will receive checks for approximately $1,480 -- their share of approximately $107.2 million in restitution awarded for mortgage servicing abuses related to the national foreclosure crisis.
"Thousands of Michigan residents were affected by the recent foreclosure crisis that consumed the country," said Schuette. "These funds will help victims of mortgage servicers' abuses rebuild their lives, and we will work to ensure devastating practices like these never happens again through enforcing new mortgage servicing standards. Borrowers should also note the payment does not limit them from seeking relief through a separate lawsuit or other claims."
To be eligible for a claim, Michigan borrowers had their mortgage serviced by one of the settlement's five participating mortgage servicers, lost their home to foreclosure between January 1, 2008 and December 31, 2011, and submitted a valid claim form. The participating mortgage servicers include Ally (formerly GMAC), Bank of America, Citi, JPMorgan Chase, Wells Fargo. Nationally, the settlement administrator, Rust Consulting, will mail 962,278 claim payments beginning the week of June 10, 2013.
In February 2012, Schuette and 48 other state attorneys general and the federal government announced the historic joint state-federal National Mortgage Settlement with the country's five largest mortgage servicers. Preliminary data shows that, so far, the servicers have provided more than $50 billion in direct settlement relief to borrowers nationwide.
A relatively small number of borrowers will not receive a check in the initial round of mailing or will receive a split payment.
Every borrower who filed a claim should have received a letter regarding their claim eligibility. Borrowers with questions about their National Mortgage Settlement payment should call settlement administrator Rust Consulting at 1-866-430-8358 or consult the Attorney General's National Mortgage Settlement FAQ section HERE.
Mortgage Settlement Background
The historic settlement followed state and federal investigations, which alleged that the five mortgage servicers routinely signed foreclosure-related documents outside the presence of a notary public and without personal knowledge that the facts contained in the documents were correct. This civil law enforcement action also alleged that the servicers committed widespread errors and abuses in their foreclosure processes.
Broad reform of the mortgage servicing process resulted from the settlement, as well as financial relief for borrowers still in their homes through direct loan modification relief, including principal reduction.
Michigan received approximately $1 billion in benefits from the settlement, and the state also received a direct payment of $97 million from the servicers. Schuette worked with the legislature and Governor Rick Snyder to establish the Michigan Homeowner Protection Fund to ensure these funds are directed toward victims of foreclosure.
"The Homeowner Protection Fund will provide much-needed counseling services, restitution for victims of foreclosure rescue scams, and assistance for families and our veterans," said Schuette.
