Matthew Tillman 
Not since the multi-billion dollar Tobacco Settlement in the late 1990's has there been such a monumental ruling on behalf of the US consumer. A historic joint state-federal settlement was reached between the five largest mortgage loan servicers and 49 state attorneys general and the federal government. The settlement provides benefits to borrowers whose loans are owned by the settling banks as well as to many of the borrowers whose loans they service.
The mortgage companies (GMAC, Bank of America, Citi Bank, JP Morgan/Chase and Wells Fargo) will provide up to $25 billion in relief to distressed borrowers and direct payments to states and the federal government. Both state and federal officials had charged the companies mortgage divisions had routinely signed foreclosure related documents without the required presence of a notary. The officials further claimed signatures were forged, legal procedures not followed and foreclosure proceedings permitted to move forward without knowledge if the facts surrounding the process were correct and justified.
Borrowers will not immediately know if they are eligible for relief. The billion dollar settlement will be performed over a three-year period. This is due to the complexity of the mortgage market and the federal and multi-state agreement. Borrowers from states who did not sign the settlement will not be eligible for any of the relief directly to homeowners. Only borrowers from Oklahoma will not be eligible for any of the relief directly due to the fact its attorneys general elected not to join the settlement.
The settlement provides assistance for:
- Homeowners currently needing loan modifications
- Borrowers who are current, but underwater
- Borrowers who lost their homes to foreclosure
- 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
