In the largest consumer financial protection settlement in U.S. history, the nation’s five largest banks and mortgage servicers agreed to create to provide at least $25 billion in consumer relief, in addition to implementing new foreclosure servicing standards, as part of the National Mortgage Settlement.
Who will be eligible for help through the National Mortgage Settlement?
According to the U.S. Attorneys General, the funds will benefit the following:
- Homeowners needing loan modifications now. This includes first and second lien principal reducation. The mortgage servicers are required to put $17 billion of the funds toward principal reduction and other forms of loan modification relief.
- Borrowers who are current, but underwater. Borrowers will be able to refinance at the current interest rates — which are at a historic low. Up to $3 billion of the settlement funds will be put toward refinancing relief nationwide.
- 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. About $1.5 billion of the funds will be distributed nationwide to some 750,000 borrowers.
In addition, the new mortgage servicing standards will require better communication with borrowers, a single point of contact, adequate staffing levels and training, and appropriate standards for executing documents in foreclosure cases.To learn more about the National Mortgage Settlement, and to view a list of Frequently Asked Questions, visit: