Colorado Attorney General John Suthers announced yesterday that, out of the $25 billion multistate settlement with Ally Financial, Bank of America, JP MorganChase, Wells Fargo and Citi, eligible Colorado homeowners are entitled to a disbursement of $204.6 million. $32.49 million will be disbursed directly to homeowners in the form of restitution, while the other monies are to be disbursed via programs such as cash-for-keys and waiver of deficiencies.
Under the settlement, Colorado will receive:
- $73.3 million that will be available to grant principal reductions on loans to make a modification possible. Approximately 40 percent of these funds will also be available to ease the effects of foreclosure, including waiving deficiency balances, enhanced cash-for-keys payments and blight prevention;
- $52.5 million in cash to the state;
- $46.3 million worth of refinancing benefits to underwater borrowers; and,
- $32.49 million in payments to homeowners who lost their homes to foreclosure between January 1, 2008 and December 31, 2011.
Further, under the settlement terms, the banks have agreed to the following:
- Commit a minimum of $17 billion directly to borrowers through a series of national homeowner relief options, including principal reduction. Given how the settlement is structured, servicers will actually provide up to an estimated $32 billion in direct homeowner relief.
- Commit $3 billion to a mortgage refinancing program for borrowers who are current, but owe more than their home is currently worth.
- Pay $5 billion to the states and federal government ($4.25 billion to the states and $750 million to the federal government).
- Provide homeowners with comprehensive new protections through new mortgage loan servicing and foreclosure standards.
- Be overseen by an independent monitor will ensure mortgage servicer compliance.
- Required to stop the use of robo-signing,
- End the process of dual tracking of loans
- Provide a single point of contact for consumers as they move through the loan-modification processes
- create an online portal for consumers to get information about where they are in the loan-modification process
- Abide by a strict set of deadlines for dealing with loan modifications
- Banks must post payments they receive to homeowners’ accounts within two business days of receiving them
- Banks will be subject to strict oversight by an independent monitor who will provide regular reports to the participating states. The banks will be subject to stiff fines if they violate the terms of the agreement
If you think you are eligible for a loan modification, principal reduction, cash-for-keys or settlement monies due to the loss of your home during the time period indicated in the settlement, you are urged to contact a local foreclosure defense attorney, or contact your bank directly.
The banks have indicated they hope to contact victims by the end of summer.
This settlement does not affect an individual homeowner’s right to bring suit against their bank.
Keith A. Gantenbein, Jr. is a Colorado foreclosure defense attorney located in Denver and servicing all of Colorado. He also handles bankruptcies, mortgage negotiations, lender liability, real estate, civil litigation, contracts and landlord/tenant. If you think you will be facing foreclosure, or are in the foreclosure process, or have had a wrongful foreclosure, contact Keith Gantenbein at (303) 618-2122 for a one-hour consultation where he will discuss your situation and go over all your options with you.
This article is not intended as legal advice. The opinions of this article are solely the opinion of the author.