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State Representative Joe Mullery
100 Rev. Dr. Martin Luther King Jr. Blvd.
651-296-4262
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E-Update
NEW RIGHTS FOR MORTGAGORS
If you have or had a mortgage either owned or serviced at any time by 5 major lenders (Bank of America, JP Morgan Chase, Wells-Fargo, Citigroup, or Ally Financial) you may have gained new rights, under a settlement reached this week with the attorney generals of 49 states. If you know someone with such a mortgage you should also let them know. Fortunately, the settlement retained the rights for private individuals to sue the banks, and the right of states to sue for claims related to the securitization of mortgage backed securities (which is where a lot of the problems started)
For loans prior to 1-1-09, mortgagors may be eligible to refinance to a lower interest rate if they are current and had no delinquency within 12 months, and are underwater (they owe more than their house is worth), and the interest rate is 5.25% or more. They may be eligible for principal reduction (if 30 days delinquent or face imminent default and if they are underwater), forbearance for the unemployed, short-sale assistance, transitional housing assistance, and other help.
Some other provisions are:
Applications for loan modifications and short sales must be processed within 30 days, and they can't start a foreclosure if a modification has been pending for 15 days
Servicer can only charge 1 month late fee for a missed payment, and must provide loan info, payment history, copies of assignments showing right to foreclose, name of investor owner, info needed to bring account current, and itemized late fees.
For those foreclosed, they may be eligible for a $2,000 rebate if they lost their home because of financial hardship related to modification or if there were errors in the foreclosure process.
It is not possible in this short summary to get into the very complicated provisions; also, some apply to mortgages before 1-1-09 and others to foreclosures between 1-1-08 and 12-31-11 I do think the banks were given too much discretion. If you might qualify for any type of relief you should contact the Attorney General or the Minnesota Commerce Dept. for more info. Also, let your friends know about these possibilities.
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