State’s mortgage servicing abuse payments total $26.3 million
INDIANAPOLIS – Indiana Attorney General Greg Zoeller announced today that checks will be sent out next week to eligible Indiana borrowers who are part of the National Mortgage Settlement.
Eligible borrowers had their mortgage serviced by one of the settlement’s five participating mortgage servicers, lost their home to foreclosure between Jan. 1, 2008 and Dec. 31, 2011, and submitted a valid claim form. Eligible Hoosiers can expect a check for about $1,480 which will be dropped in the mail between Monday, June 10 and Monday, June 17.
The participating servicers include Ally (formerly GMAC), Bank of America, Citi, JPMorgan Chase and Wells Fargo. Zoeller said 18,448 checks totaling $26.3 million will be sent to Indiana consumers, and about 55.9 percent of eligible borrowers submitted a claim – which is comparable to the national response rate of 55 percent.
“These payments are meant to help compensate borrowers for mortgage servicing abuse,” Zoeller said. “The National Mortgage Settlement payments and the new mortgage servicing standards under the review of a national monitor will help ensure the public is protected from similar errors in the future.â€
Zoeller said the payment does not limit a borrower from seeking relief through a separate lawsuit or other claims.
Nationally, the settlement administrator will mail valid claim payments to 962,278 loan records totaling $1.5 billion from June 10 through June 17.
In February 2012, 49 state attorneys general and the federal government announced the historic joint state-federal National Mortgage Settlement with the country’s five largest mortgage servicers. Preliminary data shows that, so far, the servicers have provided more than $50 billion in direct settlement relief to borrowers nationwide, much more than originally expected.
A relatively small number of borrowers will not receive a check in the initial mailing or will receive a split payment.
•Some borrowers will receive a check for less than the approximate $1,480 payment in situations where borrowers are divorced or separated and no longer live at the same address. The full per-loan amount will be paid on these loans, but the payment will be evenly split between the borrowers.
•A small number of borrowers who submitted a claim form but do not have a valid Social Security number on file will be delayed in receiving their payments while tax-related issues are addressed.
•Two servicers recently provided information on an additional 31,000 borrowers, and thus they could not be included in this distribution. Later this summer, these consumers will receive a notice and will have the opportunity to submit a payment application.
Every borrower who filed a claim will receive a letter regarding their outcome. Borrowers with questions about their National Mortgage Settlement payment should call the settlement administrator at 1-866-430-8358.
Indiana’s overall share of the settlement was about $145 million. Of that, approximately $100 million was used as direct assistance to Indiana borrowers who lost their homes due to foreclosure, or to distressed borrowers who seek to refinance and save their homes. The Indiana Attorney General’s Office received $43.8 million, with $28.8 million of that dedicated by the Legislature to the Low-Income Energy Assistance Program (LIHEAP) and the rest committed to the Consumer Protection Division and its Homeowner Protection Unit (HPU) and other efforts to prevent foreclosure.
“Indiana’s Legislature wisely channeled the settlement funds my office received into a fund to assist low-income homeowners who were most at-risk to be foreclosed upon and also the most likely to have difficulty paying their energy bills,” Zoeller said.
National Mortgage Settlement, Independent Foreclosure Review payments are separate
The IFR settlement is unrelated and separate from the National Mortgage Settlement and does not include the same governmental agencies. The IFR payments began in mid-April of 2013, and the OCC announced that final payments will be mailed in mid-July. For more information on the OCC Independent Foreclosure Review settlement, go to www.OCC.gov and click on Independent Foreclosure Review.
