Iowans who lost their homes to foreclosure during the Great Recession and who may be eligible for payment under a $25 billion national mortgage settlement will begin receiving claim forms, Iowa Attorney General Tom Miller announced Monday.
Claim forms are being mailed to more than 11,000 Iowa borrowers who lost their homes to foreclosure between Jan. 1, 2008 and Dec. 31, 2011. Eligible borrowers had mortgages serviced by Ally/GMAC, Bank of America, Citi, JPMorgan Chase and Wells Fargo, the nation's five largest mortgage servicers that agreed to the settlement with the federal government and attorneys general for 49 states and the District of Columbia. Miller led the effort on behalf of state attorneys general.
The settlement, reached in April, earmarked approximately $1.5 billion in payments for two million borrowers nationwide who lost their homes to foreclosure during that period and had their loan serviced by one of the settling servicers. The exact payment will depend upon the total number of borrowers who decide to participate.
"This payment is intended as partial compensation for the mortgage servicers' illegal conduct and servicing abuse," Miller said. "By participating, Iowa borrowers don't give up any legal rights. They're free to participate in this settlement and also pursue other legal remedies such as filing a lawsuit or participating in a class action, if they so choose." For more details on the settlement, click here.
According to new research released by JPMorgan Chase, banks trimmed 1.2 million troubled mortgages or foreclosed homes from their books in the first half of 2012. That progress could double by the end of the year, Housing Wire reported, though more than 4 million loans and properties would remain. Still, that would be down from a peak of 6 million in 2010.
Chase analysts expect the attorneys general settlement could result in 100,000 principal reduction modifications for an average of $100,000 reduced for each borrower. Servicers would have to rally in the back half of 2012 to get there. A total of just 7,000 were completed through June, but banks said they began ramping up offers over the last two months.