Home » MBJ FEATURE » Fewer than 5,000 Mississippi foreclosed homeowners to get financial settlements

Fewer than 5,000 Mississippi foreclosed homeowners to get financial settlements

About 4,235 Mississippi homebuyers whose homes were foreclosed on may be eligible for cash payments under a national settlement reached with five giant banks for fraudulent foreclosure practices, Attorney General Jim Hood’s office said.

The national foreclosure fraud settlement provides an estimated $47.1 million in direct relief to Mississippi homeowners and addresses future mortgage loan servicing practices, Hood said soon after the settlement was reached.

The number of eligible homebuyers for foreclosure settlement money could change as the AG’s office determines the exact number of Mississippi home owners victimized by robo-signings, a process by which the five banks had employees sign the foreclosure papers without reviewing to determine their validity or whether the foreclosing banks could actually show they owned the mortgages on which they were foreclosing.

Mississippi Banking Commissioner Theresa Brady said she understands that to be eligible for the robo-signing payments, the homeowner has to have had a mortgage either owned or serviced by one of the five banks — Citi, Chase, Ally/GMAC, Wells Fargo or Bank of America.

For borrowers who lost their home to foreclosure between Jan. 1, 2008 and Dec. 31, 2011, a settlement administrator designated by the attorneys general will send claim forms to persons eligible for cash restitution, according to the web site Nationalforeclosuresettlement.com, established to address questions regarding the settlement.

Even if you are not contacted, if your loan is serviced by one of the five settling banks, you are encouraged to contact your servicer to see if you are eligible, the web site says.

The $25 billion national settlement also allocates money for loan modifications for homeowners in the 50 states who owe more than their homes are worth. Mississippi is to get $13,192,086 in benefits from loan modifications and other direct relief.

Just who will get the payments and in what amounts have not been determined, Hood’s office said.

“It makes funds available for the institutions to refinance in certain instances. Banks will be responsible for contacting eligible homeowners,” spokeswoman Jan Schaefer said in an email.

Addressing the payment to borrowers, Schaefer said a claims process will be set-up through a settlement administrator who will send notices to eligible consumer who experienced a foreclosure during the relevant time frame. Mississippi has an estimate of 4,235 consumers who may be eligible for this payment.

Notices will be sent under the appropriate AG’s letterhead.

The settlement administrator will engage in skip tracing to determine the current addresses of consumers who experienced a foreclosure.

Consumers will have from 60 to 90 days to respond.

In order to receive a payment, consumers will have to execute and timely return a sworn statement regarding their eligibility.

The servicers will pay the expenses involved in administering the settlement in addition to any monetary obligations under the settlement.

Individuals will not be asked to sign a release in exchange for this payment.

The door is still open for criminal action against the companies and individuals involved, according to Hood’s office.

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