Editor's Note: The following is a press release issued by the State Attorney General's office on Monday.
SEATTLE – Washington State Attorney General Rob McKenna today announced that claim forms are going out to approximately 34,000 Washington state borrowers who lost their home to foreclosure.
Under the $25 billion national foreclosure settlement negotiated by 49 states and the federal government, borrowers who had mortgages serviced by Ally/GMAC, Bank of America, Citi, JPMorgan Chase and Wells Fargo and lost their homes between Jan. 1, 2008 and Dec. 31, 2011 may be eligible for one-time payments. Filling out and returning a claim form is the first step in receiving compensation.
“This payment is partial compensation for mortgage servicers’ illegal conduct and servicing abuses,” McKenna said. “It’s one part of a settlement that will bring $648 million in benefits to people struggling to hold on to their homes, including loan modifications for qualifying borrowers.”
McKenna added that by participating, borrowers do not give up any legal rights. They are free to also pursue other legal remedies such as filing a lawsuit or participating in a class action.
The settlement, which took effect in April, earmarked approximately $1.5 billion in payments for 2 million borrowers nationwide who lost their homes to foreclosure. Payment amounts will depend upon the total number of borrowers who decide to participate.
Forms mailed to qualified borrowers, must be returned by January 18
Last week, the national settlement administrator mailed notification postcards to the eligible borrowers. In Washington state, packets containing a letter from the Attorney General, a claim form, instructions and answers to frequently asked questions are being mailed to eligible borrowers beginning today and continuing through Oct. 12.
McKenna urges eligible borrowers to complete their claim forms and return them as soon as possible, or file them online at www.nationalmortgagesettlement.com. The deadline for claims is Jan. 18, 2013. Payment checks are expected to be mailed in mid-2013.
Free claim form assistance available
The one-page claim forms are simple to complete. However, borrowers who have questions or need help filing their claim may contact the settlement administrator at 1-866-430-8358, or send questions by email to administrator@nationalmortgagesettlement.com. The information line is staffed Monday through Friday from 5 a.m. to 5 p.m. Pacific Time.
Payment won’t stop other legal claims
McKenna 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 the Independent Foreclosure Review Process being conducted by federal bank regulators. More information about that program is available at www.independentforeclosurereview.com.
Eligible borrowers may receive 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.
Eligible borrowers not notified should contact settlement administrator
Borrowers who think they may qualify but did not receive a notice because they have moved should contact the settlement administrator directly.
Beware of scams
“Do not provide personal information or pay anyone who calls or emails claiming that they are providing settlement-related assistance,” said McKenna. “Homeowners should be on high alert for settlement-related scams. If you believe someone is conducting such a scam, contact my office at 1-800-551-6684 or file a complaint online. If you need help with your mortgage, call the free homeownership hotline at 1-877-864-HOME (4663).”
Settlement background
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.
More information:
- National Mortgage Settlement: http://www.atg.wa.gov/NationalMortgageSettlement.aspx
- Foreclosure and mortgage tips: http://www.atg.wa.gov/page.aspx?id=28330
- Washington HUD-approved housing counseling agencies: http://1.usa.gov/HjzKVo
