Posted: 5:00 a.m. Thursday, April 11, 2013
By Clark Howard
A new settlement could put a check in your mailbox as early as next week if you rightfully or wrongly went through a foreclosure in 2009 or 2010.
CNNMoney reports the $3.6 billion foreclosure settlement could impact customers who worked with mortgage servicers like Aurora, Bank of America, Chase, Citibank, Goldman Sachs, HSBC, MetLife Bank, Morgan Stanley, PNC Mortgage, Sovereign Bank, SunTrust, U.S. Bank and Wells Fargo.
Checks will range from $300 to $125,000, depending on the foreclosure situation. The highest amount of compensation will go to military service members whose homes were foreclosed while they weer deployed, which is in violation of federal law.
At the heart of the issue is improper handling of the foreclosure process on the part of the mortgage servicers.
Mortgage foreclosure procedure is determined by where you live and there are two kinds of states: Judicial foreclosure states and non-judicial foreclosure states. See what kind of state you live in.
In judicial foreclosure states, a lender has to go before a judge to prove they have a right to foreclose. That means documenting that they own the mortgage and that the homeowner hasn't paid. But doing that has proven to be very messy in light of the whole robo-signing scandal.
In non-judicial foreclosure states, it's not necessary to go before a judge. The lender simply takes your house if you're not paying. They're required to give you notice, but that's about it.
Of course, there was all the stuff about the robo-signing of foreclosure documents, false affidavits, and all the other foolishness. Hence this settlement.