National Mortgage Settlement Summary

According to the National Mortgage Settlement web site, 49 state attorneys general and the federal government reached agreement to settle a long-running dispute with the country’s five largest loan servicers: Ally/GMAC, Bank of America, Citi, JPMorgan Chase, and Wells Fargo. The settlement will provide as much as $25 billion in relief to distressed borrowers and direct payments to states and the federal government.

The agreement settles state and federal investigations finding that the country’s five largest loan servicers routinely signed foreclosure related documents outside the presence of a notary public and without really knowing whether the facts they contained were correct. Both of these practices violate the law. The settlement provides benefits to borrowers whose loans are owned by the settling banks as well as to many of the borrowers whose loans they service.

If you are a home owner, and your loan was serviced by one of the five loan servicers listed above, the settlement may apply to you. However, eligibility may take some time to determine. The agreement will be performed over a three year period.

Another point to consider is that, the agreement does not affect any individual’s rights. A consumer may still bring an individual action, be a part of a class action, or seek further review/relief from the Office of the Comptroller of the Currency (OCC).

Additionally, loans owned by Fannie Mae or Freddie Mac are not impacted by this settlement. The FAQ page on the site contains links to both sites to help you determine if your loan is owned by either Fannie Mae or Freddie Mac.

The National Mortgage web site contains quite a bit of useful content, including a list of Frequently Asked Questions about the agreement, an executive summary of the agreement, and even a list of contact information for the 49 participating state attorneys general offices.

This is a complex agreement. I may be able to help you understand your situation; I can certainly help you by discussing certain tradeoffs and options concerning home ownership and bankruptcy. You can contact my scheduler through our website for your free consultation. If you wish, you may schedule your free consultation by phone by calling us at (615) 496-1127.

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