Many homeowners wonder if they are entitled to relief under the National Mortgage Settlement. This settlement was negotiated by the Attorney Generals of several states in an effort to help struggling homeowners and to provide recovery for homeowners that already lost their homes to foreclosure. The 5 participating lenders to the Settlement are:
•Bank of America
Please note that benefits are not guaranteed even if you meet eligibility requirements; every case will be considered individually. However, you may be eligible for help under the national mortgage settlement if any one of these situations applies to you:
Scenario 1: YOU ALREADY LOST YOUR HOME TO FORECLOSURE
Potential Benefits: Cash payment of approximately $1,800-$2,000. If you still owe any money on the mortgage because of an outstanding balance after a foreclosure sale, you may have an opportunity to have some or all of that debt forgiven.
Eligibility Requirements: The home must have been your primary residence, and the foreclosure must have occurred between Jan. 1, 2008 and Dec. 31, 2011.
Scenario 2: YOU ARE CURRENT ON YOUR MORTGAGE, BUT UNDER WATER
Potential Benefits: Eligible underwater borrowers may have an opportunity to refinance loans at lower interest rates.
Eligibility Checklist: You must own and occupy your property, you must owe more on the loan than the current value of the house, you have been current on your payments for the last 12 months, hou have not filed a bankruptcy or had a foreclosure in the last 24 months, your current interest rate is at least 5.25% or more, your mortgage is not a manufactured home loan, and it is not insured by the Federal Housing Administration (FHA) or the Veterans’ Administration (VA).
Scenario 3: YOU’RE LATE ON THE MORTGAGE OR IN IMMINENT RISK OF MISSING PAYMENTS
Potential Benefits: The lenders will be more likely to approve you for loan modification, forbearance, short sale or Deed in lieu of foreclosure.
Bear in mind that the settlement only applies to the 5 participating banks. If your loan was through a different bank, you are not entitled to any relief under this plan. Over the next six to nine months, settlement administrators will identify homeowners eligible for benefits. These benefits may include immediate cash payments, loan modifications with mortgage balance reductions, or refinancing. If you are eligible, you should receive a letter from the administrator in your state. All actions resulting from the settlement are scheduled to take place over the next three and a half years. However, if you do not want to wait for your lender to get in touch with you, you can contact them directly through a website that has been established: http://www.nationalmortgagesettlement.com.
The process to receive help under the settlement will be lengthy and many homeowners will not get relief fast enough to save their home. However, for homeowners that can take advantage of the National Mortgage Settlement, its programs may be what saves a home.