Iowans foreclosed on by nation's largest mortgage servicers from Jan. 1, 2008-Dec. 31, 2011 may qualify for one-time payment; claim deadline in two weeks
(DES MOINES, Iowa) Attorney General Tom Miller reminds thousands of Iowans who qualify for a foreclosure-related one-time payment, that the claim deadline is January 18.
More than 11,000 Iowa borrowers who lost their home to foreclosure between January 1, 2008 and December 31, 2011 are likely eligible for a payment under the $25 billion national mortgage settlement that Miller announced in February. In September, Miller’s office, in conjunction with a settlement administrator, notified potentially qualified borrowers and then mailed claim forms. In Iowa, about 56 percent of those who received notices have filed claims.
Eligible borrowers had mortgages serviced by Ally/GMAC, Bank of America, Citi, JPMorgan Chase and Wells Fargo, the nation’s five largest mortgage servicers that agreed to the settlement with the federal government and attorneys general for 49 states and the District of Columbia. Miller led the effort on behalf of state attorneys general.
Those who qualify make at least one of the following claims through a simple form: they were unable to pay; their mortgage servicing company mishandled the process involving their loan modification or foreclosure alternative; or the servicer made errors during the foreclosure process.
The settlement, which took effect in April, set aside funds for borrowers who lost their homes to foreclosure during that period and had their loan serviced by one of the settling servicers. Nationally, the settlement allocated approximately $1.5 billion in payments for 1.75 million loans, including approximately $7.4 million to more than 11,000 Iowans. The exact payment will depend on the total number of borrowers who participate nationwide. All money in this fund will be paid to borrowers, and will not revert to the government or mortgage servicers.
“I hope any Iowan who received our notice in the mail responds to it, because they likely qualify for money that they’re entitled to under the settlement,” Miller said. “This is partial compensation for the mortgage servicers’ illegal conduct and servicing abuse.”
Borrowers who qualify and participate do not give up any legal rights, Miller noted, meaning that those who accept the payment can also pursue other legal remedies such as filing a lawsuit or participating in a class action case.
Miller urged eligible Iowa borrowers to complete their claim forms and return them as soon as possible in the envelope provided, or file them online at www.nationalmortgagesettlement.com. Payment checks are expected to be mailed in mid-2013.
Payment won’t stop other legal claims
Miller said eligible borrowers do not need to prove financial harm to receive a payment, nor do they give up their rights to pursue a lawsuit against their mortgage servicer or to participate in other programs. More information about that program is available at www.independentforeclosurereview.com.
Eligible borrowers may get a payment from this settlement even if they participate in another foreclosure claims process. However, any payment received may reduce payments borrowers may be eligible to receive in any other foreclosure claim process or legal proceeding.
Beware of scams
Borrowers do not need to pay anyone to file their claim. Miller warns all homeowners to be aware of settlement-related scams. Do not provide personal information or pay money to anyone who calls or emails you claiming that they are providing settlement-related assistance. If you believe someone is conducting a settlement-related scam, contact the Consumer Protection Division at 515-281-5926. Outside the Des Moines metro area, call the toll-free number: 1-888-777-4590. You can also file an online complaint ow download a complaint form on our website.
The national settlement followed state and federal investigations, which alleged that the five mortgage servicers routinely signed foreclosure-related documents outside the presence of a notary public and without personal knowledge that the facts contained in the documents were correct. This civil law enforcement action also alleged that the servicers committed widespread errors and abuses in their foreclosure processes.
Broad reform of the mortgage servicing process resulted from the settlement, as well as financial relief for borrowers still in their homes through direct loan modification relief, including principal reduction.
For more information about eligibility and filing a claim:
Iowans seeking help, answers should contact Iowa Mortgage Help or their mortgage servicer
Miller urges Iowans who are currently behind on their monthly mortgage payment, or may soon experience financial trouble, to contact the Iowa Mortgage Help toll-free hotline at 1-877-622-4866, or go to www.IowaMortgageHelp.com. The service is free, and its counselors can help Iowa homeowners identify their most appropriate course of action.