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.

Bobby Stevens told 4 On Your Side Consumer Investigator Jodi Brooks he's skeptical about whether he'll see the money, despite the fact that he found out he qualifies. (credit: CBS)

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.

4 On Your Side Money Saver Suzanne McCarroll talks to a Michelle Wood about the mortgage settlement. (Credit: CBS)

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

Comments (7)
  1. asodeska says:

    Once again, the government scams the bankers. Having first forced them to accept NINJA – no job, no income mortgages, they now punish the banks for trying to recover the property that THEY OWN. Mortgages are real simple:- If you don’t make your payments, you lose the property. And that is the way it HAS TO BE.
    But the Imperial leadership says otherwise, and is forcing the banks to pay for what they have done, which they did LEGALLY.

  2. Kenneth Lively says:

    If they would have done it legally they wouldnt be in the shape their in. And a lot of us hard working people would not be in the mess we find ourselfs in at 62 years old it is very hard to start over

  3. bluedog says:

    Colorado benefits by receiving less that 1% of the settlement?

  4. Picknroll says:

    So, now we taxpayers are going to pay the mortgages of those people that took out loans they couldn’t afford? I feel like a fool for paying off my mortgage.

    1. Fred Stanley says:

      The Banks are paying, not taxpayers. You ARE a fool.

  5. Steve Jones says:

    I called WFB at 800 288-3212 and pressed “0” to get a live person. Before they got on the line; here is my information.

    I have a Wells Fargo Bank home mortgage. I access my home mortgage information on WFB website. I am set up on autopay which indicates that WFB recieves my payment each month. My interest rate is 6.375%. I ask the representative if I qualify under the $25 billion program to recieve a lower interest rate? She responded by saying that I did not because it was part of the Fannie May program. She suggested that I may qualify under their other programs for refinancing. I accepted the new 800# and after I hung up – I threw the paper in the trash. So my question; is this another scam like the “loan modification program” that many did not qualify. So I figure the money not used in the “loan modification Program” and the new “$25 Billion Program” will mysteriously disappear into the hands of the current administration. What do you think.

    Steve Jones
    Hartsel, Colorado

  6. Adolph says:

    It would be interesting to know the exact date your loan became part of Fannie Mae. As they were negotiating the big settlement perhaps the lender made sure it became part of the Fannie Mae program. If so, the lender may be in violation of RESPA-look up RESPA laws and quote from there to you lender-“Request an Inquiry Response. I believe that is what is called. However you will find out as you study RESPA laws that enforces lenders to comply…..wishing you the very best. Good luck.

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