2013 National Mortgage Settlement Update
by Mila from West Covina, CA, USA
Ask Kate about National Mortgage Settlement for eligible homeowners: After nationwide mortgage servicers committed fraud by illegally foreclosing on distressed homeowners, they were forced to pay $25 billion to fund principal reductions, loan modifications, and refinancing efforts, and send payments to thousands of borrowers who lost their homes.
More National Mortgage Settlement Details
It's been one year since breaking news of the National Mortgage Settlement. This is the largest consumer financial protection settlement in our nation's history.
Timeline of Mortgage Settlement News February 2015!
Rust Consulting re-issues checks that expired because they never were deposited or cashed.November 2013!
Record breaking $13 billion JPMorgan Settlement
earmarks $4 billion for borrowers.August 2013!
Joseph A. Smith, monitor for the National Mortgage Settlement begins final review to determine NMS success.June 2013!
Checks in the amount of $1480 to go out between June 10th and 17th. May 2013!
National Mortgage Settlement checks have been delayed again. Now Rust is saying to expect your check mid 2013. April 2013!
Timeline update for issuing payments to homeowners from the Independent Foreclosure Review Payment Agreement! Details in comments below! February 2013!
Borrowers who lost their homes in foreclosure also to receive funds!
The federal government and 49 state attorney generals forced 5 of the largest offending loan servicers to pay $25 billion to eligible homeowners, as well as participating states, and the federal government for illegally foreclosing on homeowners.
- Bank of America
- JPMorgan Chase
- Wells Fargo
Why? Prepared documents were improperly signed (robo-signing) and contained unverified information, breaking laws that protect the rights of all homeowners, with or without mortgage difficulties.
Immediate relief, $17 billion, went to principal reductions of 1st and 2nd mortgages and loan modifications. An additional $3 billion went to refinancing of underwater mortgages. Partial funds have been designated to reform consumer and foreclosure protection and loan servicing standards.
How to Contact Washington D.C., Write Your Government Agencies, and File a Mortgage Complaint
You have the power to make a change! Contact your elected representatives and government agencies to tell your story, file a complaint, express an opinion, and request changes that affect homeownership.
1. Submit a complaint with the Consumer Financial Protection Bureau, established by Congress to protect consumers, or you can call 855-411-2372.
2. Go to WhiteHouse.gov, 'Contact Us' to reach Corresponding with the White House. This is is a quick and simple way to write the President, telling about your struggles with homeownership and ask for specific change.
3. Go to Senate.gov, 'Find Your Senators', scroll down to your state and click. You will be given your US Senators with contact information. Send the same letter you sent to the White House.
4. Go to House.gov, 'Find Your Representative' and fill in your zip code. You will be given your House of Representatives with contact information. Send the same letter you sent to the White House and Senate.
5. Go to State.gov Of course, first fill in your state's name. Then on your state website, do a search (for example, 'mortgage help') to find contact information. Send the same letter you sent to the White House, Senate, and House of Representatives.
6. Call your Better Business Bureau to report specific companies. For example, report Rust Consulting to the BBB if you did not receive your settlement check.
February 2013 News: Direct Payments to Foreclosed Homeowners
Here's the February 2013 update! $1.5 billion has been earmarked for homeowners who lost homes in foreclosure between January 1, 2008 and December 31, 2011.
Eligible homeowners were notified by mail and required to submit claims. If you received notification but have not heard back or have questions about your claim, call the National Mortgage Settlement Administrator at 866-430-8358.
By the way, the minimum payout to foreclosed homeowners is $840. Yes, if that miniscule amount doesn't rile you up, I don't know what will. $840 settlement for illegal foreclosure of the family home!
May 2013 Breaking News! Timeline for issuing payments to homeowners from the National Mortgage Settlement Agreement and update on amount! Details in comments below!
Arguments Against National Mortgage Settlement
I've heard the arguments that the settlement was not necessary because the homeowners failing to make house payments deserved foreclosure. Well, that attitude is a slippery slope.
Foreclosure laws were established to prevent the banks from illegally seizing homes. Yet this is exactly what happened during the robo-signing days. In order to foreclose more quickly, banks and loan servicers did not follow the basic and required legal channels set up to protect homeowners.
In short, banks and loan servicers committed fraud. This is unacceptable. It took a hard hit to their pocketbooks to wake up them up. Unfortunate for their investors but necessary.
Now it's time to hear from Mila in West Covina, California.
Mila asks Kate: National Mortgage Settlement and FHA Short Refinance
Hi Kate, Thanks for all the very helpful information in your website. My mortgage balance with Wells Fargo is $366,000. Underwater value is approximately $330,000.
I was denied a loan modification in 2012 due to my lack of hardship according to Wells Fargo. I have 1 late mortgage payment in October of 2012 but am now current with the help of relatives. However, one Wells Fargo rep told me I cannot afford the house and should short sale! What?
Anyway what's your opinion on the National Mortgage Settlement and FHA short refi. Wells Fargo says they have no idea. Can you direct me to a lender? Thank you very much. Mila
Kate Answers: National Mortgage Settlement and FHA Short Refinance
Yes, it does seem the new tactic of the banks is to encourage homeowner default either through deed release (deed in lieu) or short sale of the property
I have a strong hunch this is because the banks are not able to produce the original promissory note required by the government to foreclose on borrowers.
If not so serious, Wells Fargo's lack of sincerity is nearly humorous. That a Wells Fargo employee would tell you they have no idea about the National Mortgage Settlement or FHA Short Refinance is mind boggling.
Did these 5 mortgage giants learn nothing from their forced pay-out under the National Mortgage Settlement? Is their participation in the $25 billion fine for illegal conduct already swept under the carpet? I doubt their financial investors have forgotten!
FHA Short Refinance Options
Let's discuss the FHA Short Refinance. Contrary to its name, FHA Short Refinance is a plan for non-FHA borrowers that involves principal reductions.
This program started out a few years ago as an ingenious idea through Making Home Affordable. But lender participation dwindled quickly probably due to the cost. Today, the FHA Short Refinance option has stagnated in spite of proposals to revive and modify the plan into the HARP 3 refinance program
By the way, go here to read the nuts and bolts of the FHA Short Refinance Program for Borrowers with Negative Equity
FHA Short Refinance and HAMP Through Your Loan Servicer vs HARP
You asked about finding a lender. Unfortunately, because of the principal reduction to your mortgage balance, your loan servicer Wells Fargo is your only option for the FHA Short Refinance.
But here are two other suggestions. You are free to shop lenders for a HARP 2.0 refinance
. My best advice is to ask your friends which mortgage professionals did a good job refinancing their homes.
Interview several and get written Good Faith Estimates
. Ask for copies of their mortgage rate lock disclosures
to review policies and avoid the heartache of losing a low interest rate.
Or (take a deep breath) apply to Wells Fargo for a HAMP loan modification
Good luck and best wishes,
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Have You Seen Recent Ask Kate Answers
Ask Kate's 2015 National Mortgage Affordability Newsroom
HARP ends December 31, 2015: Learn about lower interest rates and no PMI for homes with less than 20% equity at HARP 2 Refinance Announcement.
HAMP ends December 31, 2015: Learn about affordable payments for struggling homeowners at HAMP Tier 2 Modification News.
March 16, 2015: HOPE NOW mortgage assistance event for struggling homeowners in San Bernardino, California. Call 888-995-HOPE for address and hours.
February 18, 2015: Rust Consulting is re-issuing National Mortgage Foreclosure Settlement checks to this week to replace expired and uncashed checks.
January 26, 2015: Julian Castro, Secretary of HUD, announces a .5% reduction in FHA annual mortgage insurance premiums. Get the mortgage news that's projected to save new FHA borrowers an average of $900 a year.
December 2014: Don't miss the four new financial incentives designed to generously benefit struggling homeowners.
The more you read my blog's Mortgage News, Updates, and Insider Secrets, the more you'll learn to navigate the lender maze.
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