If you lost your home because of mistakes made in the documents that were used to foreclose on your home, you were probably the victim of what’s come to be called “robosigning”. And you weren’t alone. It’s estimated that there were big mistakes made in the documents used to foreclose on millions of homes following the housing bust.
The good news
If you lost your home because of mistakes made by your lender, there is some good news. Beginning the first of April, mortgage companies will start sending checks to people like you that were harmed by a wrongful foreclosure. These payments will vary from a couple of hundred dollars to as much as $125,000.
A deal with 10 banks
This comes as the result of a deal that was made with 10 banks that ended a wide-ranging review of some 4.2 million mortgages. The purpose of this review was to figure out which homeowners had been damaged by “robosigning” and other bad document practices that had resulted in unlawful foreclosures. These borrowers are to be compensated for their losses. Unfortunately, only 104,000 loan reviews have been completed to date and this is after 18 months and $1.5 billion in fees paid to independent consultants.
How these payments are determined
These loans have been divided into 11 categories based on how much harm the borrowers suffered. The list of damages ranges from small minor clerical mistakes all the way up to improperly seized homes when the homeowner wasn’t even in default. While the maximum payment will be $125,000, it is estimated that the average payout will be $850 per eligible loan.
How to know if you qualify
If you were active in the foreclosure process between January 1, 2009 and December 31, 2010 you may qualify for this program. Also, your loan must have been serviced by one of the 10 banks that agreed to the settlement. This includes Aurora Bank, Citibank, Sovereign Bank, Bank of America, JP MorganChase, HSBC, MetLife Bank, PNC, US Bank and Wells Fargo Bank.
GMAC Mortgage, OneWest. and Everbank did not sign off on the deal and will do their own mortgage reviews.
You should receive a notice
The 14 biggest servicers of mortgages must send out mailers alerting borrowers that they cab request a review if they feel they suffered “financial errors, misrepresentations, or other deficiencies in foreclosure proceedings on the sale of their primary home”.
What to do if you don’t receive the mailer
If you don’t receive the notification mailer but feel that you were the victim of an unwarranted foreclosure, you should contact the bank where you send your mortgage payment to see if you might be eligible for help. However, you can forget about it if Fannie Mae, Freddie Mac, or FHA backed your mortgage as you will not be eligible for this program.
Dealing with other debts
If you’ve lost your home and are struggling with other debts, we can help. Our debt counselors have excellent relationships with the credit card companies and other lenders who provide unsecured loans. If you contract with us to settle your debts, our counselors will contact your creditors and should be able to negotiate settlements that will save you thousands of dollars. We charge you nothing upfront. In fact, you pay us nothing until all your creditors have agreed to our settlement offers and we have provided you with a payment plan you approve. In other words, you have nothing to lose by allowing us to negotiate debt settlements for you. Contact us today to learn more about debt settlement, what it could cost you and how it could help you become debt free.