Lauren Barrett speaking to a group of people Tuesday in Richmond.

Missouri Attorney General Chris Koster’s office is sending assistant attorneys general to every county in the state to spread the word on how homeowners may benefit from the national mortgage settlement with the country’s largest lenders. Click to hear KMZU’s Chelsea Wade talk with Assistant Attorney General Lauren Barrett:

Lauren Barrett

Information from the Office of Attorney General Chris Koster

Attorney General Chris Koster joined a landmark national mortgage settlement in order to bring approximately $195 million to Missouri taxpayers and the state. The settlement with Bank of America, Citigroup, JPMorgan Chase, Wells Fargo, and Ally Financial is the largest civil settlement reached by the Attorneys General since the tobacco settlement.

The agreement settles state and federal investigations into whether the country?s five largest loan servicers routinely signed foreclosure-related documents outside the presence of a notary public and without knowing whether the facts they contained were correct. The settlement provides benefits to borrowers whose loans are owned by the settling banks as well as to many of the borrowers whose loans they service.

KEY PROVISIONS OF THE SETTLEMENT

  • Aid to homeowners who need loan modifications now, including first and second lien principal reduction. Borrowers who are underwater in their homes and behind on their payments but could afford to make them at a reduced rate will receive an estimated $86.5 million in principal reductions and other borrower assistance programs. Nationally, the servicers are required to work off up to $17 billion in principal reduction and other forms of loan modification relief nationwide.State attorneys general hope the settlement?s requirement for principal reduction will show other lenders that principal reduction is one effective tool in combating foreclosure and that it will not lead to widespread defaults by borrowers who can afford to pay.
  • Aid to borrowers who are current, but underwater. Borrowers whose houses are worth less than they owe will be able to refinance at today?s historically low interest rates. Servicers will have to provide up to $3 billion in refinancing relief nationwide, roughly $38 million of which will go to Missourians.
  • Payments to borrowers who lost their homes to foreclosure with no requirement to prove financial harm and without having to release private claims against the servicers or the right to participate in the OCC review process. Missourians who have been foreclosed upon are eligible to receive roughly $2,000 each, up to about $31 million. Nationwide, $1.5 billion will be distributed to some 750,000 borrowers.
  • Payments to signing states for penalties and economic harm caused by the unfair and deceptive conduct. The state of Missouri will receive over $40 million.
  • First ever nationwide reforms to servicing standards, which no single federal or state agency has been able to achieve. These servicing standards require single point of contact, adequate staffing levels and training, better communication with borrowers, and appropriate standards for executing documents in foreclosure cases, ending improper fees, and ending dual-track foreclosures for many loans.
  • State AG oversight of national banks for the first time.
    • National banks will be required to regularly report compliance with the settlement to an independent, outside monitor that reports to state Attorneys General.
    • Servicers will have to pay heavy penalties for non-compliance with the settlement, including missed deadlines.
  • Banks are still accountable for other claims not covered by this settlement. The agreement holds the banks accountable for their wrongdoing on robo-signing and mortgage servicing and offers a narrow release related to this conduct.
    • A joint federal-state task force has been formed to investigate and prosecute those responsible for the collapse of the mortgage lending and investment markets.
    • Individuals may still pursue private claims.
    • This settlement includes absolutely no criminal immunity for any individual who violated the law.

TIMELINE

  • Over the next 30 to 60 days, settlement negotiators will be selecting an administrator to handle the logistics of the settlement and monitor compliance.
  • Over the next six to nine months, the settlement administrator, attorneys general and the mortgage servicers will work to identify homeowners eligible for the immediate cash payments, principal reductions, and refinancing. Because of the complexity of the mortgage market and this agreement, borrowers will not immediately know if they are eligible for relief.
  • This settlement will be implemented over the next three years.

WHERE YOU CAN GO FOR HELP

The Attorney General’s Office.  For more information, to register a foreclosed address, or for further assistance, contact the Attorney General?s Office by:

  • Clicking here
  • Calling (855) 870-7676
  • Writing to:
    • Attorney General Koster
      Mortgage Servicing Settlement
      P.O. Box 899
      Jefferson City, MO 65102Be sure to include your name, current address, phone number or email address, loan servicer, and address of the foreclosed property along with the date of foreclosure (if applicable).

For loan modifications and refinance options, borrowers may be contacted directly by one of the five participating mortgage servicers. Keeping in mind the timeline above, you may contact the banks directly if you need additional information:

  • Ally Financial/GMAC: (800) 766-4622
  • Bank of America: (877) 488-7814
  • Citi: (866) 272-4749
  • Chase: (866) 372-6901
  • Wells Fargo: (800) 288-3212

For payments to foreclosure victims, a settlement administrator designated by the attorneys general will send claim forms to eligible persons. 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 at the numbers above to see if you are eligible.

If you believe you are eligible for relief under this settlement but are concerned you will be difficult to locate, please contact our office. We will collect and forward your information to the appropriate person to ensure you are contacted if you are eligible.

More information will be made available as the settlement programs are implemented. For more information on the proposed agreement:

Loans owned by Fannie Mae or Freddie Mac are not impacted by this settlement. You may visit the following websites to learn if your loan is owned by either Fannie Mae or Freddie Mac:

These sites will also include information about mortgage and foreclosure programs you may be eligible to access.

 

IMPORTANT DOCUMENTS

Mortgage Flier

County Forums

 

IF YOU HAVE QUESTIONS, CALL THE HOTLINE AT (855) 870-7676