Relief from Foreclosure Settlement Slowly Reaches Homeowners

Since the housing sector collapsed in the 2008, and the market was flooded with foreclosures, the federal government began to take action in an effort to stem the tide. It can be argued that some of those measures were ineffectual, but some homeowners are beginning to get some much-needed relief from the national foreclosure settlement.

Earlier this year, the country’s five biggest banks agreed to pay $25 million after investigations revealed they used fraudulent and abusive practices to foreclose on homes. Now the funds from the settlement are beginning to trickle down to homeowners.

Under the terms of the settlement, mortgage lenders agreed to use some of those funds to write down the principles on underwater loans or grant a mortgage modifications, two effective prevention measures.

Five lenders—Bank of America, CitiMortgage, Ally Financial, JP Morgan Chase and Wells Fargo – reported that they granted over $10.56 billion to homeowners nationally giving 137,846 some foreclosure relief to weary borrowers, according to a report released by the lenders.

Over 75,000 homeowners accounting for $8 billion completed a short sale or a deed in lieu of foreclosure. The remaining funds were used to waive unpaid principle balances.

The report also stated they improved their servicing practices. The terms of the settlement gave mortgage servicers until October to meet thirty standards outline by the agreement.

However, the Office of the Mortgage Settlement Oversight Committee has not yet conducted their audit to confirm the bank’s claims.

Relief for homeowners is helps stabilize our communities and housing sector which is a key component to economic recovery. If a homeowner has the will they can stop foreclosure. They just have to reach out to foreclosure attorneys or housing counselors to detail the alternatives to losing their homes.