Kentucky Attorney General Jack Conway Wednesday announced that under the terms of the national mortgage settlement, two million postcard notices have been mailed this week to U.S. homeowners who lost their homes to foreclosure between Jan. 1, 2008 and Dec. 31, 2011.
Notices were mailed on Sept. 17 to bout 5,400 Kentucky homeowners who were foreclosed upon during the relevant time period, and who are now eligible for payments totaling $10.7 million, according to a news release from Conway's office.
Depending upon the number of eligible participants, the amount payable to these borrowers will be up to $2,000 per eligible household. To be eligible, homeowners must have had loans serviced by Ally/GMAC, Bank of America, Citi Bank, JP Morgan Chase or Wells Fargo and lost their homes either through sheriff sale, short sale or deed in lieu of foreclosure between Jan. 1, 2008 and Dec. 31, 2011.
"In communities across Kentucky and the nation, homeowners affected by the mortgage foreclosure crisis are getting much needed relief as a result of this historic settlement," Conway said. "This settlement is about providing second chances for those who have lost their homes or owe more than their homes are worth. If you believe you are eligible for relief under this settlement, please watch for important communications from my office in the coming days and weeks."
The postcard notice was mailed to the last known address of eligible borrowers based on records obtained from the banks. The postcard will be followed by a letter on Office of the Attorney General letterhead instructing these borrowers how to apply for monetary benefits under the settlement. A copy of the notice is available at http://ag.ky.gov/mortgagesettlement/Documents/mortgage_settlement_notice.pdf.
A follow-up letter with paperwork to complete will be sent directly to consumers from the attorney general in October. An example of the letter may be viewed by using the following link http://ag.ky.gov/mortgagesettlement/Documents/mortgage_settlement_letter.pdf . Homeowners should receive a letter and claim form from the Attorney General by Oct. 19.
What to do if you do not receive a notice and believe you are eligible?
Since most homeowners who lost their home have moved on to a new address, Conway said he wants to make sure they have an opportunity to participate in this settlement payout. Homeowners who lost their home to foreclosure, short sale or deed in lieu of foreclosure and do not receive this postcard notice and follow up letter, should call a toll free telephone number that has been set up to accept information and provide application forms for payment. The toll free number to contact is 1-866-430-8358. A live operator should be available at this number from 6 a.m. to 6 p.m. daily. Otherwise, a voice message can be left for the administrator. The deadline to make a claim is Jan. 18.
Details about the settlement eligibility requirements and other benefits can be found at http://nationalmortgagesettlement.com/ .
Beware of scam artists
Conway also warns all homeowners to beware of potential scams that may surface related to this settlement. There is no cost to eligible borrowers to participate in this settlement. If anyone solicits you by telephone, over the Internet or by direct, written solicitation offering to assist you in obtaining a payment under this settlement for a fee, it is a scam and you should report it to the Attorney General's Office of Consumer Protection at 888-432-9257 option 3.
Also, if homeowners receive any solicitation that is not addressed from the Office of the Attorney General, it should be ignored. This could be an attempt by a scammer to steal your identity or financial information.
Mortgage Settlement History
Forty-nine state attorneys general reached the historic $25 billion settlement with five of the nation's largest banks in February. Kentucky received a total of $58 million under the settlement.
In July, Conway announced the distribution of $19. 2 million in settlement money to agencies that create affordable housing, provide relief or legal assistance to homeowners facing foreclosure, redevelop foreclosed properties and reduce blight created by vacant properties.
More than $38 million is being allocated to consumers who qualify for refinancing, loan write downs and debt restructuring.
According to a post-settlement interim report released in August, mortgage servicers from the nation's five largest banks provided $14.1 million in settlement-related relief to 477 Kentucky homeowners between March 1 and June 30. Borrowers received an average assistance of $29,629. As of June 30, mortgage servicers were processing relief claims for an additional 219 borrowers totaling $7.4 million.
The report also shows that an additional 84 Kentuckians were able to refinance their homes through the settlement. These borrowers held mortgages that exceeded the current value of their homes. The average interest rate reduction was 3.37 percent.
The banks must provide the remaining benefits over a three-year period or face severe financial penalties.
For additional information and a list of frequently asked questions, visit the Attorney General's mortgage foreclosure settlement page at www.ag.ky.gov/mortgagesettlement .