Connecticut attorney general George Jepsen announced Friday that programs of benefits resulting from the $25 billion mortgage foreclosure servicing settlement are moving forward in the state.
The five largest loan servicing companies â€" ""Bank of America"":https://www.bankofamerica.com/, ""JP Morgan Chase"":http://www.jpmorganchase.com/corporate/Home/home.htm, ""Wells Fargo"":https://www.wellsfargo.com/, ""Citigroup"":http://www.citigroup.com/citi/, and ""Ally Financial"":http://www.ally.com/index.html?CP=ppc110188 â€" that were parties to the settlement are to alert mortgage customers to the new programs, which include $119 million in loan modifications and $36 million in refinancing relief. Customers are also to be informed of the criteria that will be used to determine if they qualify for changes to their mortgage loans. Borrowers living in Connecticut are encouraged to contact their loan servicers for consideration for the settlement programs.
[IMAGE]The mortgage servicers involved are required to complete 75 percent of consumer relief obligations within two years and 100 percent within three years. Offers for principal reduction loan modifications have already been made to some customers, and other offers are expected over the next year.
[COLUMN_BREAK]""We are seeing real progress by the banks in rolling out these progams,"" Jepsen said. ""While many borrowers are expected to benefit, unfortunately, not everyone will qualify.""
Out of Connecticut's $190 million share of the settlement funds, an estimated $119 million is going into loan modifications. The banks have also agreed to provide $36 million in refinancing to Connecticut borrowers whose homes are worth less than their mortgages. Furthermore, they agreed to provide cash payments of about $1,500 to an estimated 7,500 borrowers in the state who experienced loan servicing abuses and lost their homes to foreclosure between the start of 2008 and the end of 2011.
In addition to contacting their servicers, distressed homeowners can also make direct contact with representatives of their banks at a state-sponsored mortgage loan assistance planned for July 10 for eastern Connecticut. The event will be held at the University of Connecticut in Storrs. More information can be found at the state ""Department of Banking website"":http://www.ct.gov/dob/cwp/view.asp?a=2235&q=486992.
The $28 million in direct funding to Connecticut from the settlement was allocated to expand existing foreclosure prevention programs, including a foreclosure prevention hotline, a fair housing center, housing counselors, and nonprofit legal aid groups.
In addition to providing money for mortgage foreclosure prevention, the settlement also imposed new mortgage loan servicing standards on the five major mortgage servicers. These standards were set to end past foreclosure abuses like robo-signing, improper documentation and lost paperwork. They will also impose stricter standards for oversight of foreclosure processing and will give homeowners the right to appeal loan modification denials.
An ""online tool"":https://www.mortgageoversight.com/report-client-issues/ has been created by independent settlement monitor Joseph A. Smith, Jr. to allow consumer advocates to report mortgage servicing complaints. Jepsen's announcement, which includes contact information for the five major servicers, can be found ""at this link"":http://www.ct.gov/ag/cwp/view.asp?Q=505060&A=2341.