State’s share of mortgage settlement could take months to sort out
Wednesday, February 15, 2012
Homeowners who wish to find out whether they are eligible for mortgage or foreclosure relief as a result of the $25 billion bank settlement can contact the Washington State Attorney General’s office at 800-551-4636 or visit Washington Attorney General.
Information is also available at National Mortgage Settlement.
A state official this week said Washington’s portion of the recently announced $25 billion national mortgage settlement could take months to dole out to recipients who lost houses to foreclosure or are on the brink of falling behind.
“The best advice I can give these people is to be patient. You will receive a letter within 60 to 90 days,” said Dave Huey, the state’s assistant attorney general.
Huey was on the executive team of attorneys general from all 50 states that negotiated the landmark settlement from an investigation of the nation’s five largest mortgage servicers, Bank of America Corp., JPMorgan Chase & Co., Wells Fargo & Co., Citigroup Inc. and Ally Financial Inc., formerly GMAC.
Troubled Clark County homeowners and foreclosure victims are urged to call the attorney general’s office if they carried or still carry a mortgage with one of the five banks, Huey said.
“We’ll be issuing progress reports as time goes by,” he said.
The deal translates to $648 million in benefits for troubled homeowners and foreclosure victims in Washington, a state earmarked to receive a much smaller slice of the pie than California, where the settlement is expected to generate $18 billion in benefits. With Florida expecting to receive $8.4 billion in benefits, it’s clear that the value the states expect to receive from the settlement is more than the official $25 billion price tag.
That’s because banks’ actions, such as principal reductions, have a financial value in addition to the cash they are contributing to the settlement, Huey said.
Up to $483 million of Washington’s money will be used to modify at-risk homeowners’ loans by reducing the principal balance and interest rates. About $24 million will be issued as compensation to foreclosure victims in checks of up to $2,000.
Officials used a formula to divvy up the settlement. California, Florida, Arizona and Nevada consistently turned in the highest number of foreclosures during the four-year-long housing downturn.
The investigation was launched in 2010 following an uproar over banks that used false or incomplete documentation and “robo-signers,” people who rushed to sign thousands of documents a day without reviewing the details.