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Tuesday, January 15, 2013

National mortgage settlement can help those who have lost homes, those who are struggling

Qualified borrowers who lost their homes to foreclosure from five major banks have until Friday to file claims for a one-time payment under the $25 billion national mortgage foreclosure settlement, while those who are struggling with “underwater” mortgages have a longer period to seek relief under a huge national settlement.

Both programs are part of a national mortgage-relief settlement reached in April with the five largest mortgage banks for people who lost their homes between Jan. 1, 2008, and Dec. 31, 2011. ...

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Qualified borrowers who lost their homes to foreclosure from five major banks have until Friday to file claims for a one-time payment under the $25 billion national mortgage foreclosure settlement, while those who are struggling with “underwater” mortgages have a longer period to seek relief under a huge national settlement.

Both programs are part of a national mortgage-relief settlement reached in April with the five largest mortgage banks for people who lost their homes between Jan. 1, 2008, and Dec. 31, 2011.

An estimated 7,600 New Hampshire residents are eligible for the one-time payment, according to James Boffetti, assistant New Hampshire attorney general who oversees consumer matters.

A federal administrator has estimated that “perhaps $4.5 million in one-time direct payments” could go to New Hampshire residents, if that number holds up.

Those people must apply by Friday, by calling the attorney general’s mortgage hotline at 866-522-4450.

They must have been foreclosed upon by one of the five biggest lenders in the country: Ally/GMAC, Bank of America, Citi, JPMorgan Chase or Wells Fargo.

Many more people who still own their homes but are facing foreclosure are likely to be aided by other provisions in the national settlement, said Boffetti. These include people who dealt with many other banks or mortgage-holding entities.

The national settlement earmarked $5 billion to help people, of which about $10.5 million came to New Hampshire. This figure is being used by housing counseling agencies to hire counselors to advise homeowners who are “underwater” – whose home is worth less on the market than the mortgage they took out before the housing bubble burst – and attorneys to fight foreclosures in court.

Many other people can be, or have been, assisted by reductions in interest or principal payments as part of the biggest portion of the settlement, Boffetti said.

Nationally, banks were penalized $20 billion if they didn’t help mortgage holders in the form of restructured loans – reduction in principal or interest rate – or short sales. This has been an incentive for them to help problem loans.

“I have talked to consumers who got letters directly from their bank reducing the principal, or the interest rate, saying you don’t have to do anything about it,” said Boffetti. “The estimated total principal reduction in NH was $19 million, and there are signs we might do better than that,” he said.

For more information on New Hampshire participation in the national settlement, visit doj.nh.gov/consumer/mortgage-
settlement/index.htm

David Brooks can be reached at 594-6531 or dbrooks@nashua
telegraph.com. Follow Brooks’ blog on Twitter (@GraniteGeek).