A multi-billion national settlement among 49 states' attorneys general and five major banks will have implications for those who endured a Colorado Springs foreclosure.
Our Colorado Springs foreclosure attorneys have been closely following the news regarding the settlement, which aims to reduce the mortgage payments for those who are underwater on their homes, as well as grant monetary relief to those who may have been unjustly forced from their homes.
The settlement amounts to $26 billion in all. But what does it mean for you?
To understand this, we have to first look at what the loan servicers and mortgage lenders agreed to do. The servicers and banks essentially have pledged about $17 billion that will go toward decreasing mortgage payments for homeowners who owe a great deal more than their home is worth and who are behind on those payments. This is expected to equal out to about $20,000 of reduction for each homeowner. For those whose mortgages are held by Bank of America, those reductions could be even greater, equaling about $100,000 or possibly more.
Another thing that these entities agreed to do was refinance mortgages for homeowners who are up-to-date on their payments. This will allow them to clasp onto the low interest rates that are available right now.
Next, the banks have committed about $5 billion to the federal and state government. With that money, homeowners who were improperly forced from their homes will receive lump sum payments of between $1,500 and $2,000 - barely the cost for moving expenses, but certainly a start.
Another $1 billion is being paid to the Federal Housing Administration by Bank of America, the parent company of Countrywide Financial, which is alleged to have defrauded the federal housing agency.
The settlement also requires that banks get rid of their robo-signing techniques altogether. This was essentially a technique in which banks would churn out hundreds of foreclosure documents each day, often with agents having no verification of the facts to which they were attesting.
If your home was foreclosed upon between 2008 and 2011, you may be eligible to receive a payment, and you should notify your bank. The exact amount of the payment is going to depend on how many people seize on it - and about 750,000 are expected to do so.