Questions and answers to mortgage settlement
For Nevada homeowners wondering how they are impacted by mortgage settlement, the federal government has put up a website to help those who might have been impacted. Visit that website at www.nationalmortgagesettlement.com.
The National Mortgage Settlement has also prepared some answers for homeowners:
Question: What is a mortgage servicer and how do I know who services my loan?
Answer: A mortgage servicer administers mortgage loans, including collecting and recording payments from borrowers. A servicer also handles loan defaults and foreclosures, and may offer loss mitigation programs to assist delinquent borrowers.
The company that you make your monthly payment to is your mortgage servicer. Your mortgage servicer may or may not be a lending institution and may or may not own your loan. Many of the loans administered by servicers are owned by third-party investors.
This settlement involves the nation's five largest mortgage servicers and you may reach them at the phone numbers below:
Ally/GMAC: 800-766-4622
Bank of America: 877-488-7814
Citigroup: 866-272-4749
JP Morgan Chase: 866-372-6901
Wells Fargo: 800-288-3212
Loans owned by Fannie Mae or Freddie Mac are not impacted by this settlement. You may visit the following websites to learn if your loan is owned by either Fannie Mae or Freddie Mac:
These sites will also include information about mortgage and foreclosure program you may be eligible to access.
Question: How will I know whether this settlement affects my situation?
Answer: Only homeowners in the states who joined the settlement are eligible for benefits under this settlement. Borrowers from Oklahoma will not be eligible for any of the relief directly to homeowners because Oklahoma elected not to join the settlement.
Because of the complexity of the mortgage market and this agreement, which will be performed over a three-year period, borrowers from the settlement states will not immediately know if they are eligible for relief.
For loan modifications and refinance options, borrowers may be contacted directly by one of the five participating mortgage servicers.
For borrowers who lost their home to foreclosure between Jan. 1, 2008, and Dec. 31, 2011 a settlement administrator designated by the attorneys general will send claim forms to persons eligible for cash restitution.
Even if you are not contacted, if your loan is serviced by one of the five settling banks, you are encouraged to contact your servicer to see if you are eligible.
In any event, borrowers may contact their mortgage servicer to obtain more information about specific loan modification programs and whether the borrower may be impacted by this settlement.
More information will be made available as the settlement programs are implemented. For more information on the proposed agreement
Question: How does this settlement hold the banks accountable?
Answer: This is a settlement that primarily addresses the banks' servicing of loans, including their handling of foreclosures. One of the primary areas of attention was the practice known as "robo-signing" where banks submitted foreclosure documents that were not properly reviewed or notarized. This settlement holds the banks accountable for their servicing violations through substantial financial penalties and extensive consumer relief.
This is the second largest civil settlement ever obtained by the state attorneys general. It's second only to the tobacco settlement that has spread payments to the states over 25 years. The settlement will cost the nation's five largest mortgage servicers, which control about 60 percent of the mortgage servicing market, an estimated $25 to $32 billion.
The settlement will require the banks to accomplish a massive undertaking -- changing their broken system of servicing loans into one that is functional. The banks will reduce the principal on many of their loans -- something that they have resisted for years -- to allow homeowners to keep their homes. They will also refinance loans for "underwater" borrowers who have been unable to refinance due to negative equity. They will pay billions of dollars to the states, and, most importantly, commit billions more to consumers.
The banks will be subject to a federal court order enforceable by a federal judge. In addition, a special independent monitor will have the authority to oversee the banks and require their compliance. Federal agencies and state attorneys general can enforce compliance if there are violations.
The agreement holds the banks accountable for their wrongdoing on robo-signing and mortgage servicing. This settlement does not seek to hold them responsible for all their wrongs over the past five years.
The agreement and its release preserve legal options for others to pursue. Governmental entities and private parties are aggressively pursuing securities cases against the banks. A joint federal-state task force has been formed to investigate and prosecute those responsible for the collapse of the mortgage lending and investment markets.
For more information or to find answers to basic questions, go online to: www.nationalmortgagesettlement.com
Contact reporter Chris Sieroty at csieroty@reviewjournal.com or 702-477-3893.
