The settlement with five national lenders will not bring buyers relief for 2-3 years after filings. It will take 6 or more months to identify borrowers who are eligible to receive compensation from the settlement and it will be a long process before former home owners will see a check.
According to Housing and Urban Development Secretary Shaun Donovan “this historic settlement will provide immediate relief to homeowners, forcing banks to reduce the principal balance on many loans, refinance loans for underwater borrowers, and pay billions of dollars to states and consumers.”
According to the terms of the agreement lenders have 3 years to fulfill the agreement. Which relief is not immediate. Borrowers who may benefit are listed below.
- If you lost your home to foreclosure between Jan.1, 2008, and Dec. 31, 2011: You may receive about $2,000. First, the settlement administrator will send claim forms to those who are eligible. Officials say borrowers who were “not properly offered loss mitigation or who were otherwise improperly foreclosed” will be eligible. Approximately 750,000 people could receive checks.
- If you are current on your mortgage but owe more than what your house is worth, you may qualify for refinancing relief under the settlement: The settlement provides up to $3 billion to refinance underwater homes. To qualify, you would need to be current on payments and your mortgage must be owned by one of the five banks in the settlement. If your loan is owned by Fannie Mae or Freddie Mac you don’t qualify, even if one of these banks services your loan. And if your loan is owned by investors, it will depend on the agreement the servicer has with the investors. These lenders don’t own most of the mortgages they service, which is why this agreement helps only a limited number of borrowers.
- If you can’t afford your current mortgage payment but would be able to make payments on a smaller loan: You may be eligible to participate in the principal reduction program in this settlement, which provides $17 billion for foreclosure relief efforts such as short sales and write-downs. Again, loans owned by Fannie and Freddie don’t qualify. According to the settlement announcement, “mortgage servicers have three years to reach loan modification targets and fulfill refinancing commitments. Servicers must reach 75 percent of their targets within the first two years.”(Read more: Mortgage deal questions answered | Bankrate.com http://www.bankrate.com/financing/mortgages/mortgage-deal-questions-answered/#ixzz1mHIY60NR)
We can hope that when this all gets underway and hope that the process is learned and with that it will help with the process to move quickly.