Understanding the Robosigning Mortgage Settlement Offer: 8 Key Things Every Homeowner Facing Foreclosure Should Know


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The National Mortgage Settlement with the five largest mortgage lenders have been announced. Let’s review some of the finer points and discuss how this $25 billion foreclosure settlement will/can help struggling homeowners.

1) RE Time Period: Over a 3-year period, lenders will begin reviewing for eligibility of homeowners who may be awarded a cash restitution if they lost their house to foreclosure within this timeline, January 1, 2008 to December 31, 2011.

2) RE Ownership of Mortgage: Your mortgage must be owned by Fannie Mae or Freddie Mac. This means the government institution of Fannie and Freddie bought the rights to own your mortgage. This is not your mortgage servicer; ie, the ones who  sends you monthly mortgage statements.

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3) Eligible States: Only States that participated in the Foreclosure Settlement will be offered help under the terms of this deal. So far, Oklahoma is the only state that will not qualify for assistance, as this state chose not to be part of the lawsuit.

4) Banks Included: The 5 major banks included in this settlement are: Bank of America, Citi, JP Morgan Chase, Ally/GMAC and Wells Fargo.

5) RE Underwater Homeowners: $10 billion will be allotted for principal reduction relief to current homeowners who are underwater.

6) Funds for Refinancing: $3 billion will be allotted for refinance relief for homeowners.

7) Help for Military Homeowners: Service Members will also benefit from the foreclosure mortgage settlement if they were wrongfully foreclosed on. The SCRA Act protects service members and was enacted on December 1, 2006.

Note: SCRA is the acronym for the Servicemembers Civil Relief Act. It is “. . . the law that now governs legal protections for members of the United States Military.” Learn more about the SCRA Act.

8) More Help for Military Personnel: Service Members may also find relief if they were charged interest over 6% from January 1, 2008 to present.

Many Lenders are also now announcing new programs to help struggling homeowners and as we predicted more and more lenders will be offering principal reductions as a means to help the housing market recover and also homeowners.

Changes to HARP, the Government’s Home Affordable Refinance Program, Explained

Under the recent changes to HARP 2.0 program established by the Obama administration, the program highlights are as follows:

1) RE Payment History: You must have a good 12-month payment history;

2) Loan-to-Value Ratio: LTV must be higher than 80%;

3) Mortgage Ownership: Mortgage must be backed and owned by Fannie Mae or Freddie Mac;

4) RE Refnancing and HARP: If you refinanced under HARP previously you would not be eligible; and

5) Date of Mortgage Ownership: Fannie Mae / Freddie Mac would need to be the owner of the mortgage after May 31, 2009.

If you are interested in refinancing under the HARP program you should contact a licensed mortgage broker and contact your lender.

The above are only some of the highlights to the settlement and to the HARP program it will take some time to see how these programs will really impact struggling homeowners. Check back for more important articles and updated news about foreclosure nationwide, specifically Florida.

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What the Foreclosure Settlement & More Short Sales Mean for Homeowners Facing Foreclosure

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Home Foreclosure News of the Day: Some States Not Using Foreclosure Settlement Monies to Help Struggling Homeowners

Timeline For Foreclosure In All 50 States  

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About the Author: Kym Irving is a freelance writer who writes about foreclosure news, real estate news, and other topics of interest to her.

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