Underwater Home Owner Settlement Update
The massive $26 Billion dollar settlement between the government and certain large banks regarding abusive practices, in particular the use of suspect documents (robo-signing), covers the following banks:
- Bank of America
- Ally Financial Inc/GMAC Mortgage
- JP Morgan Chase & Co.
- Wells Fargo & Co.
The settlement is complex so impatience will only hurt the consumer as the details are filled in. Homeowners may still bring individual claims. Loan servicers have up to 3 years to ID eligible borrowers. The formula is chiefly concerned with reducing mortgage principal, short sales and refinancing. Contact your mortgage company by phone or through their web site to keep track of your own situation.
The Refinance program tied up with this applies only to loans owned by the banks. Another “little” problem with this segment is that you must be current on your mortgage but underwater to qualify. Even if these conditions are met the the lowest rate available for this is 5.25%.
Borrowers foreclosed upon between 2008 and 2011 are eligible for a cash payment ranging between $1500 and $2000 depending upon how many apply. Label this under pathetic. This agreement is nothing more than an agreement to comply with existing law. This agreement was finalized with the approval of 49 of 50 of the Attorney’s General for the states. Oklahoma has negotiated a separate pact. The only real cash for consumers amounts to $5 Billion, with the rest going to state and federal governments to pay for regulatory programs.
According to the federal government a lender loses $60,000.00 on average with each foreclosure.
Currently there are 11 million homeowners under water by $700 Billion, an average of $65,000.00 each.