The National Mortgage Settlement has netted 6,564 Idahoans injured by foreclosure due to poor service.
Each will receive get about $1,480, Attorney General Lawrence Wasden says. Borrowers receiving a payment had a mortgage serviced by one of the five participating mortgage servicers, lost their home to foreclosure between January 1, 2008 and December 31, 2011, and submitted a valid claim form. Participating servicers are Ally (formerly GMAC), Bank of America, Citi, JPMorgan Chase and Wells Fargo.
“These payments to Idaho borrowers recognize the substandard mortgage servicing practices that resulted in so many unnecessary foreclosures,” Wasden says. The payment does not prevent a borrower from seeking relief through a separate lawsuit or other claims, he says.
Nationally, the settlement administrator, Rust Consulting, will mail 962,278 payments between June 10-17.
“These payments are part of our efforts to hold the banks accountable through the National Mortgage Settlement,” Wasden said. “The settlement also outlines mortgage servicing standards that the five servicers have implemented.”
Wasden added that preliminary data shows that, so far, the settlement has also resulted in more than $50 billion in direct relief to borrowers nationwide. In Idaho, this relief includes:
- $14.7 million in first lien principal reduction changes;
- $86.8 million in completed short sales and forgiven deficiencies;
- $18.2 million in completed refinances; and
- $37.9 million in completed second lien extinguishments.
A relatively small number of borrowers will not receive a check in the first mailing or will receive a split payment. Borrowers who are divorced or separated and no longer live at the same address will receive a check for less than the about $1,480 payment. The full per-loan amount will be paid on these loans, but the payment will be evenly split between the borrowers. Payments to a small number of borrowers who submitted a claim, but who do not have valid Social Security numbers on file, will be delayed while tax-related issues are addressed. Two servicers provided information about 31,000 more borrowers that was received too late to be included in this distribution. Affected borrowers will receive a notice and will be able to send a payment application later this summer.
Ineligible borrowers who filed a claim will receive a letter explaining why they did not qualify for a payment. Borrowers with questions about their payment should call settlement administrator Rust Consulting at 1-866-430-8358.
Rust Consulting is also the settlement administrator for the Independent Foreclosure Review (IFR), which is unrelated and separate from the National Mortgage Settlement. The IFR payments began in mid-April of 2013, and the Office of the Comptroller of the Currency (OCC) announced that last payments will be mailed in mid-July. For more information about the IFR, go to www.OCC.gov and click on “Independent Foreclosure Review.”