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What does the mortgage settlement mean for me?
Borrowers across the country are asking themselves this very question, wondering whether they will get a piece of the landmark $25 billion agreement. The settlement is directed at borrowers who are in danger of losing their homes, as well as those who already have.
Unfortunately, you won't immediately know whether you qualify.
The mortgage settlement is an agreement between 5 major banks, 49 state attorneys general and the federal government. Even though eligible borrowers will be contacted in 6 to 9 months, the settlement will take 3 years to fully execute.
Residents of Oklahoma are not included in the mortgage settlement, and neither are loans owned by Fannie Mae and Freddie Mac. Mortgages must be owned or serviced by Ally, Bank of America, Citi, JP Morgan Chase or Wells Fargo.
Covered borrowers who are underwater, delinquent or at risk of defaulting will be eligible for a principal reduction or other forms of loan modification. Up-to-date borrowers may be able to refinance at a lower interest rate. And those who lost their home to foreclosure between 2008 and 2011 will be eligible for a $2,000 payment.
Even if you meet the above criteria, it would be unwise to pin your hopes on a modification or money. The settlement is going to take a significant amount of time to disperse, meaning you are still liable under the current terms of your mortgage.
You should continue making payments and try to work with your lender. If you wait for the mortgage settlement, it may be too late to save your home.