On February 8, various government authorities and five of the nation’s largest lenders announced a $26 billion settlement to provide assistance to current and previous homeowners who were negatively influenced by the recent housing crisis. The State of Minnesota will be participating in this settlement, making Minnesota homeowners eligible for up to $280 million in assistance. Currently, the five lenders that have signed on are:
1. Ally/GMAC
2. Bank of America
3. Citi
4. JP Morgan Chase
5. Wells Fargo
More lenders may sign on to this settlement. As others join, their participation will be listed here. This information is all very new and, while all the details are not yet available, here are some brief answers to the biggest questions:
What will this settlement do?
This settlement will provide several different forms of relief, ranging from additional refinancing/modification options to direct payments to borrowers who have already been through foreclosure.
Who is eligible?
While the answer to this question has not been made completely clear, there are a couple things we do know:
1. If your mortgage is with one of the five lenders listed above, and you are struggling or have recently struggled with your mortgage, you may be eligible.
2. Loans owned by Fannie Mae or Freddie Mac are NOT included in this settlement.
What is the timeline?
Realistically, it is important to remember that large undertakings such as this can take much longer than anticipated to actually roll out and start operating. This settlement is set to take place over a three year period. It could be a matter of months before homeowners begin feeling any effects of this settlement.
What are the next steps?
Over the next 6-9 months, lenders will be working to identify eligible candidates. They will attempt to reach out to everyone that qualifies. That being said, it never hurts to be proactive and call them first. My advice is to be patient, but consistent. Contact your lender regularly to get updates!
Where can I get more information?
If you believe you may be eligible or would like more information about this settlement, please click here. If you are interested in learning more about Twin Cities Habitat for Humanity’s Mortgage Foreclosure Prevention Program, please call us at 612-331-4090 ext. 3.
Haley Wotzka, Foreclosure Prevention Counselor, Twin Cities Habitat for Humanity
Information excerpted from the Minnesota Homeownership Center and www.nationalmortgagesettlement.com
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