DENVER (CBS4)– The U.S. Justice Department along with Attorneys General from 49 state announced a mortgage settlement agreement with 5 banks worth $25 billion. The settlement means that thousands of homeowners will get help with current mortgages and those who lost their homes to foreclosure. The settlement will bring $204.6 million dollars to Colorado.
Under the terms of the settlements, the money will get divided up among several groups.
–$73.3 million will go for loan modifications that will help homeowners refinance into lower interest rates
–$46.3 million will help borrowers who are underwater on their mortgages
–$32.49 million will go directly to homeowners who lost their homes to foreclosure between January 1, 2008 and December 31, 2011
–$52.5 million will be a cash payment to the state which will be used for foreclosure prevention and outreach
“We’re seeing a lot more money than we would have otherwise, and also it’s delivering real results to people now,” said Mike Saccone, spokesman for the Office of the Colorado Attorney General.
Colorado Attorney General John Suthers was on the executive committee that negotiated the settlement. He was in Washington, D.C. this morning for the settlement announcement. Suthers focused his comments on the federal/state partnership that brought the settlement about.
“So when all these Attorneys General looked at this settlement as it’s structured, they realized the bottom line was there was no way that without the federal partnership in this case could we achieve the results we have achieved,” Suthers said from the podium at the news conference.
The banks involved in the settlement are Bank of America, JP Morgan Chase, Wells Fargo, Citi and Ally Financial, Inc. Together these banks are responsible for 60 percent of the mortgage loans in the nation.
“This actually will change the way the banks do business moving forward,” Saccone told CBS4.
The settlement means an end to robo-signing, and duel tracking of loans. It also calls for a more streamlined loan modification process including a single point of contact for consumers, an online portal for updates on the modification process, and a strict set of deadlines for moving a modification along.
“It’s about accountability for the consumer. That’s what we’ve been waiting for a long time,” said Pat Drawe, a banker with W.J. Bradley.
Drawe says it’s also vindication for the homeowner who’s been beaten up during the decline of the housing market.
Michelle Wood welcomes a little vindication. Wood lost her dream home to foreclosure.
“I try not to think about it so I don’t start crying. It was a place we wanted to stay forever,” she told CBS4.
Under the settlement, Wood may be entitled to a $1,200 to $2,000 payment.
“It’s not enough, but right now it’s a blessing and it will do,” she said.
There are specific eligibility requirements for each group of people helped by the settlement. Those who may get a cash payment need to wait for their bank to contact them. Those who qualify for refinancing or modification help should call their bank at these dedicated toll-free numbers:
– Bank of America – 1-877-488-7814
– Chase – 1-866-372-6901
– Citi – 1-866-272-4749
– GMAC/Ally – 1-800-766-4622
– Wells Fargo – 1-800-288-3212
There is a complete Consumer Guide to the Foreclosure Settlement on the Colorado Attorney General’s Web site.
Watch 4 On Your Side Money Saver Suzanne McCarroll’s report on the settlement in the video clip below:
Watch 4 On Your Side Consumer Investigator Jodi Brooks’ report on the settlement below:
–Written for the Web by CBS4 Special Projects Producer Libby Smith