4.2M Borrowers to Start Receiving Foreclosure Payouts

Daily Real Estate News | Wednesday, April 10, 2013

  

About 4.2 million eligible home owners who underwent foreclosure in 2009 and 2010 will start receiving cash payments on Friday, ranging from $300 to $125,000. The payouts are part of a $3.6 billion settlement over foreclosure mishandlings reached among 13 mortgage servicers and the government.

Military service members whose homes were repossessed while they were on active duty will receive the largest checks — $125,000. The Servicemembers Civil Relief Act prevents military personnel from being foreclosed on while on active duty.

Other home owners will receive payments from servicers that charged unfair fees or failed to do a loan modification.

Originally, the 13 servicers had agreed to conduct independent foreclosure reviews for each borrower, but the reviews proved too costly and time consuming, says Brian Hubbard, a spokesman for OCC. Also, only about 439,000 borrowers had asked for a review out of the some 4 million who were eligible.

In January, lenders revised the settlement terms to include all borrowers in default in 2009 and 2010 to be eligible for the payments, Hubbard says. For those borrowers who did request independent foreclosure reviews, they will receive double the compensation in most cases.

The following servicers are participating in the settlement: Aurora, Bank of America, Chase, Citibank, Goldman Sachs, HSBC, MetLife Bank, Morgan Stanley, PNC Mortgage, Sovereign Bank, SunTrust, U.S. Bank, and Wells Fargo. Goldman Sachs and Morgan Stanley will issue their payments to customers at a later date. All other servicers will start issuing payments to customers this week and will be completed by July.

Source: “Payments coming for borrowers in $3.6B foreclosure settlement,” CNNMoney (April 9, 2013)

New Grant for Military First-Time Home Buyers

Daily Real Estate News | Tuesday, July 26, 2011

 

A new program is offering financial assistance to first-time home buyers who are veterans or active-duty military members. The Pentagon Federal Credit Union Foundation, a nonprofit national organization, is offering the assistance through its Dream Makers program.

Active duty personnel, veterans, retired members of the military, and employees of the U.S. Department of Defense and the Department of Homeland Security may be eligible for a grant up to $5,000 to use on down payments and closing costs when buying their first home. The grants can be applied to a mortgage from any financial institution.

“Members of the military often put off buying a home earlier in their careers because they’re moving around the country a lot,” says Kate Kohler, chief operating officer for the PenFed Foundation. “We want to make sure they have resources to add immediate equity into their home when they decide to buy.”

To view eligibility requirements, visit www.pentagonfoundation.org/dreammakers.


Source: “Veterans and Active Duty Can Get Financial Help When Buying Their First Home,” Pentagon Federal Credit Union Foundation (July 25, 2011)

Banks to Pay $22 Mil for Military Foreclosure Errors

Bank of America and Morgan Stanley have agreed to pay more than $22 million combined to settle federal civil charges on improperly foreclosing on military personnel, The Associated Press reports.

Between 2006 and 2009, the mortgage lenders foreclosed on 178 military members in 22 states without getting court approval. The military members affected will each receive $125,562, on average. The banks will also continue to investigate whether improper foreclosures occurred in 2009 through 2010.

The settlement is "easily the largest amount recovered" in a case of improper military foreclosures, Thomas E. Perez, an assistant attorney general, told The Associated Press.

The Servicemembers’ Civil Relief Act offers protections to military personnel to prevent foreclosures. It bans evictions or creditors trying to repossess their property while on active duty.

JPMorgan Chase earlier this year admitted to overcharging about 4,000 military personnel on mortgages and wrongly foreclosing on 14. It paid $2 million in settlement charges originally and last month paid more than $60 million to settle a class-action lawsuit regarding the overcharges.

Source: “2 Firms to Pay for Improper Military Foreclosures,” Associated Press (May 26, 2011)

Chase to Pay $27M in Military Lending Dispute

J.P. Morgan Chase & Co. has reached a $27 million settlement in a class action lawsuit, which accused the bank of overcharging thousands of active-duty military members as well as wrongly foreclosing on a handful of military members.

To date, the company has issued $6 million in payments to borrowers who were overcharged. Chase will also provide an estimated $6.4 million in additional benefits to borrowers who may have been wrongly foreclosed upon.

"We hold ourselves accountable and responsible for these mistakes, and fixing them is just the beginning of a new way forward with the military and veteran community," says Frank Bisignano, chief administrative officer of J.P. Morgan.

Shortly after admitting the company’s military lending mistakes, the bank announced several programs to help active members and veterans as well as making a statement that it would not foreclose on any currently deployed military personnel.

Source: “JP Morgan Agrees To $27 Million Settlement To Resolve Military Lending Issues,” Dow Jones Business News (April 21, 2011)

Chase Offers Military Aid, After Past Mistakes

J.P. Morgan Chase & Co. is launching programs in April to help military families and vets stay in their homes. The announcement comes shortly after J.P. Morgan admitted to wrongly foreclosing on 18 active-duty military members and overcharging 4,500 on mortgages.

The military programs will include reduced mortgage rates for those covered under the Servicemembers Civil Relief Act, as well as enhanced mortgage modifications for active-duty military personnel since Sept. 11, 2011.

Chase also said it would not foreclose on any active military personnels' homes. If a wrongful foreclosure does occur, the bank would forgive all of that military member’s remaining mortgage debt, the company said. Also, within the next five years, the bank says it plans to donate 1,000 homes to military personnel and vets.

"This company has a great history of honoring military and veterans, and the mistakes we made on military foreclosures are a painful aberration on that track record," says Chairman and Chief Executive Jamie Dimon.

Meanwhile, following Chase’s admission of wrongfully overcharging and foreclosing on military personnel, lawmakers are considering new legislation to help prevent military personnel from losing their homes and being faced with high interest rates.

Source: “J.P. Morgan Unveils Mortgage Programs for Military Customers,” Dow Jones News Service (Feb. 15, 2011)

Fannie Mae Announces New Help for Military Homeowners

WASHINGTON, DC — At an event today at the Pentagon, Fannie Mae (FNMA/OTC) and the U.S. Army announced new initiatives to help service members who are struggling with their mortgage payments avoid foreclosure. The effort includes a mortgage payment forbearance of up to six months where the death or injury of a service member on active duty causes a hardship for impacted military families with a mortgage obligation.

The company also announced the creation of a special hotline, 877-MIL-4566, available to all service members to receive guidance about their mortgage options and enlist assistance.

"The men and women of our Armed Forces have shown extraordinary commitment to our country while facing unique challenges as a result of their service," said Jeff Hayward, Senior Vice President of Fannie Mae's National Servicing Organization. "No family impacted by a death or injury in the line of duty should have to face the additional burden of foreclosure as a result of the hardship. We want to do all that we can to provide support to these families at a time of need as we honor their sacrifices and service to our country."

The Honorable Katherine Hammack, Assistant Secretary of the Army (Installations and Environment), remarked, "We who serve alongside our military recognize the great sacrifice they and their families make each day. The initiative between Fannie Mae and the lending community recognizes their sacrifice and demonstrates our gratitude for those who face economic hardships as a result of their service. We are profoundly grateful for this heartwarming response from the lending community as they become partners in designing and implementing this initiative."

Service members or surviving spouses who may be eligible for the special forbearance are to contact their mortgage company. The mortgage company may grant forbearance of up to six months under Fannie Mae's "Unique Hardships" guidelines with Fannie Mae's approval. Under forbearance, the mortgage company may reduce or suspend the borrower's monthly payments for the specified period. Credit bureau reporting will be suspended during the forbearance to minimize any derogatory impact.

Fannie Mae has also created printed materials that will be available on military bases to help service members understand their options if they find themselves having trouble making their mortgage payments. Fannie Mae's new consumer education Web site, KnowYourOptions.com, is another resource for struggling homeowners. The site outlines the choices available to homeowners and provides guidance on how they can contact and work with their mortgage company to find solutions.

Service members are encouraged to visit www.KnowYourOptions.com/Military or call the Fannie Mae Military Support Hotline, 877-MIL-4566.

Vets Get One Year Tax Credit Extension

As part of the Economic Stimulus Package, the federal government is encouraging renters to become homeowners by offering a tax credit. This credit requires that the buyer enter into a contract by April 30, 2010, and close the escrow by June 30, 2010.

However, members of the Military, the Foreign Service, and employees of the intelligence community have an extra year, through to buy a principal residence in the U.S. and claim the federal tax credit.

Here is what the IRS states on their website:

Members of the military and certain other federal employees serving outside the U.S. have an extra year to buy a principal residence in the U.S. and qualify for the credit. Thus, an eligible taxpayer must buy, or enter into a binding contract to buy, a principal residence on or before April 30, 2011. If a binding contract is entered into by that date, the taxpayer has until June 30, 2011, to close on the purchase. Members of the uniformed services, members of the Foreign Service and employees of the intelligence community are eligible for this special rule. It applies to any individual (and, if married, the individual’s spouse) who serves on qualified official extended duty service outside of the United States for at least 90 days during the period beginning after Dec. 31, 2008, and ending before May 1, 2010.