Written by
The Associated Press
ST. PAUL, Minn. - State officials say Minnesota mortgage borrowers will be eligible for a total of $280 million from a national settlement between states and the country's biggest mortgage lenders.
Minnesota Attorney General Lori Swanson and Commerce Commissioner Mike Rothman announced Minnesota's settlement Thursday. Five major U.S. banks agreed to pay about $26 billion to reimburse American homeowners.
Only homeowners who use those five particular banks are eligible for part of the settlement. Borrowers can call their bank to see if they are eligible.
- Ally/GMAC: (800)766-4622
- Bank of America: (877) 488-7814
- Citi: (866) 272-4749
- JPMorgan Chase: (866) 372-6901
- Wells Fargo: (800) 288-3212
Loans owned by Fannie Mae or Freddie Mac are not impacted by this settlement.
The deal requires the banks to reduce loans for about 1 million households. Some homeowners will be eligible for direct relief checks. The relief is targeted at mortgage holders who owe more than their homes are worth.
Swanson's office says in Minnesota, $167 million will go to loan reductions and other relief, and $113 million will go to direct payments to and refinancing help for borrowers.
For more information, try these resources:
Minnesota Department of Commerce, (651) 296-2488 or (800) 657-3602
The state's Attorney General's website
National Mortgage Settlement website
Here's who qualifies:
If you were foreclosed on between 2008 and 2011, you could receive up to $2,000. But you get that money only if you were trying to save your home by modifying the loan or there were errors in the foreclosure process.
Plus, homeowners who owe more on their house than it's worth, also known as being 'underwater' will be able to refinance, if they're up to date on their payments and are paying more than 5.25 in interest.
Finally, the banks agreed to tougher lending standards, including stricter oversight and a simpler application process.
In 2009, Bank of America foreclosed on Flor Garcia's home. She no longer could afford the payments after going through a divorce and her workplace cut back her hours.
She tried to work with the bank to save her house, but she says the bank would not work with her.
"I was calling to the bank but they never answered the phone or they keep connecting me with other people and then get disconnected," said Garcia.
Dave Snyder with Jewish Community Action works with homeowners like Garcia who are facing foreclosure. Although the mortgage settlement doesn't go as far as he would like it to, he believes it is a start.
"There were over 25,000 foreclosures in 2010. So the problem is enormous. So this settlement is a positive step," he said.
A positive step for Garcia that's too little, too late. Her house has been sold.
"They will never give me back my home," she said.
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