Attorney General Kilmartin announced that approximately 5,500 Rhode Island residents who lost their primary residence due to an improper foreclosure process between January 1, 2008 and December 31, 2011 should expect to receive notice by mail with important information about how to file a claim for funds under the $25 billion National Mortgage Settlement. Those borrowers who are eligible had mortgages serviced by Ally/GMAC, Bank of America, Citi, JPMorgan Chase and Wells Fargo. They are the nation's five largest mortgage servicers which agreed to the settlement with the federal government and attorneys general for 49 states and the District of Columbia.
The settlement, which took effect in April, earmarked approximately $1.5 billion in payments for two million borrowers nationwide who lost their homes to foreclosure during that period and had their loan serviced by one of the settling servicers. The exact payment will depend upon the total number of borrowers who decide to participate.
"This payment is intended as partial compensation for the mortgage servicers' illegal conduct and servicing abuse," said Attorney General Kilmartin. "By participating, borrowers do not give up any legal rights. They're free to participate in this settlement and also pursue other legal remedies such as filing a lawsuit or participating in a class action, if they so choose."
Forms mailed to qualified borrowers, must be returned by January 18 Last week, the national settlement administrator mailed notification postcards to the eligible borrowers nationwide. In Rhode Island, packets containing a letter from Attorney General Kilmartin, claim form, instructions and answers to frequently asked questions are being mailed to eligible borrowers beginning today and continuing through Oct. 12.
Kilmartin urged eligible Rhode Island borrowers to complete their claim forms and return them as soon as possible in the envelope provided, or file them online at www.nationalmortgagesettlement.com. The deadline for all claims is January 18, 2013. Payment checks are expected to be mailed in mid-2013.
Free claim form assistance available The one-page claim forms are simple to complete. However, borrowers who have questions or need help filing their claim can contact the settlement administrator, toll-free, at 1-866-430-8358, or send questions by email to firstname.lastname@example.org. The information line is staffed Monday through Friday from (7 a.m. to 7 p.m. Central).
Payment won't stop other legal claims Kilmartin noted eligible borrowers do not need to prove financial harm to receive a payment, nor do they give up their rights to pursue a lawsuit against their mortgage servicer or to participate in the Independent Foreclosure Review Process being conducted by federal bank regulators. More information about that program is available at www.independentforclosurereview.com.
Eligible borrowers may get a payment from this settlement even if they participate in another foreclosure claims process. However, any payment received may reduce payments borrowers may be eligible to receive in any other foreclosure claim process or legal proceeding.
Last week, Kilmartin announced a $1.57 million grant to Rhode Island Legal Services to help stop, prevent, or delay the foreclosure of approximately 1,800 homes each year. Rhode Island Legal Service's direct representation includes assisting homeowners facing foreclosure in bankruptcy court, providing housing and foreclosure prevention counseling, negotiating directly with lenders on loan modifications and principal reductions, and filing lawsuits against predatory lenders.
Eligible borrowers not notified should contact settlement administrator Borrowers who believe they may qualify for a payment, but did not receive a notice because they have moved, should contact the settlement administrator directly to provide that information:
Call toll-free: 1-866-430-8358. The line is staffed Monday through Friday from (7 a.m. to 7 p.m. Central).
Beware of scams Borrowers should not need to pay anyone to file their claim. Kilmartin warns all homeowners to be aware of settlement-related scams. Do not provide personal information or pay money to anyone who calls or emails you claiming that they are providing settlement-related assistance. If you believe someone is conducting a settlement-related scam, contact the Rhode Island Department of Attorney General Consumer Protection Unit at 401-274-4400 or visit www.riag.ri.gov.
Settlement background The national settlement followed state and federal investigations, which alleged that the five mortgage servicers routinely signed foreclosure-related documents outside the presence of a notary public and without personal knowledge that the facts contained in the documents were correct. This civil law enforcement action also alleged that the servicers committed widespread errors and abuses in their foreclosure processes.
Broad reform of the mortgage servicing process resulted from the settlement, as well as financial relief for borrowers still in their homes through direct loan modification relief, including principal reduction.
For more information about eligibility and filing a claim:
Call toll-free: 1-866-430-8358 (hearing impaired: 1-866-494-8281). The line is staffed Monday through Friday from (7 a.m. to 7 p.m. Central).