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January 7, 2013

Deadline nears for victims of bank foreclosure abuses

Local agency can help residents find out — for free — if they qualify for a cash payment of at least $840 as part of the National Mortgage Settlement, but they must apply by Jan. 18.

Would you throw away an envelope full of hundreds of dollars?

Not intentionally, but you may have done just that if you received a letter this past fall and potentially again just a few weeks ago with information about the National Mortgage Settlement but then tossed it in the trash thinking it was just junk mail.

The letters were sent out in October to about 750,000 people across the United States who lost their houses to foreclosure between Jan. 1, 2008, and Dec. 31, 2011, telling them they could be eligible to receive a cash settlement of at least $840, according to officials with the Dalton-Whitfield Community Development Corporation (CDC).

This local agency, at 205 W. Gordon St. in Dalton, can help you find out — for free — if you are supposed to get this money.

Last February, 49 state attorney generals and the federal government announced a settlement with the country’s five largest mortgage servicers — Ally/GMAC, Bank of America, Citi, JPMorgan Chase and Wells Fargo — to address mortgage servicing, foreclosure and bankruptcy abuses. These five companies service about 60 percent of the nation’s mortgages.

The settlement provides as much as $25 billion in relief to distressed borrowers and direct payments to states and the federal government. It’s the largest multistate settlement since the tobacco settlement in 1998.

Basically, the agreement settles state and federal investigations finding that the country’s five largest mortgage servicers routinely signed foreclosure-related documents outside the presence of a notary public and without really knowing whether the facts they contained were correct.

 Both of these practices violate the law. The settlement provides benefits to borrowers whose loans are or were owned by the settling banks as well as to many of the borrowers whose loans they serviced during the time frame specified in this article.

If you had a loan serviced by one of the “Big Five” mortgage servicers and lost your home due to foreclosure between Jan. 1, 2008 and Dec. 31, 2011, then you may have received a notice letter and claim form from the National Mortgage Settlement Administrator in late September through early October and thrown it away, thinking it was a scam.

“At present it looks like only about 20 percent of the people who are eligible to receive part of the settlement have already applied,” said Gaile Jennings of the Dalton-Whitfield CDC. “Some people may be getting the letter and thinking, ‘More junk mail! Somebody’s trying to scam me because I’ve already lost my house.’”

It’s not too late to try and get part of the settlement, but the deadline to apply (Jan. 18, 2013) is rapidly approaching, according to Jennings.

“If you did throw it away, don’t worry. We can still go on their website and show you how to apply,” Jennings said. “We can put the information in the computer, and it’ll tell if you are qualified. We know there are people in Whitfield County who deserve to get some of that money, and we want to help them get it.”

Jennings says that if all eligible parties apply for the settlement, each would receive $840.

“The bad news is that a lot of people who qualify are going to toss the information and not know they’re eligible to get the money,” she said. “The good news is that if you do apply and are approved, you’re going to get a larger percentage of the settlement and may end up getting thousands of additional dollars because other eligible people didn’t apply.”

Jennings stressed that the CDC’s services are free and that no one eligible for the settlement should be asked to pay to file by companies offering to help them for a fee.

“We know there are scammers out there, including some in the Atlanta area who are taking advantage of our residents by charging them,” she said.

For more information about applying for the settlement, call the Dalton-Whitfield CDC at (706) 876-1630.

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