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NC homeowners to receive $30M as part of national mortgage settlement

Posted June 4, 2013

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— More than 21,000 people in North Carolina can expect refund checks this month totaling $30.6 million as part of a national mortgage settlement reached last year with the nation's five largest mortgage servicers, Attorney General Roy Cooper said Tuesday.

Homeowners who had their mortgage serviced by Ally (formerly GMAC), Bank of America, Citi, JPMorgan Chase or Wells Fargo and lost their home to foreclosure between 2008 and 2011 could receive approximately $1,480 each if they submitted a valid foreclosure payment claim.

Checks will be mailed out between June 10 and June 17, and everyone who filed a claim will receive a letter regarding their outcome.

The payouts are part of $338 million North Carolina received as part of a $37 billion national settlement that Cooper said "is preventing unfair foreclosures, helping people keep their homes and stabilizing home values here in North Carolina and across the country."

The remainder of the money will go toward a variety of state initiatives, such as helping current homeowners at risk of defaulting on their mortgages, refinancing loans at lower rates and hiring more housing counselors through the North Carolina Housing Finance Agency.

Funding will also go to provide legal guidance for those facing foreclosure as well as aiding in the prosecution of lending and financial crimes and enforcing laws.

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  • fuzzmom Jun 5, 2013

    rocket, good question, but it happened, and it happened a lot, namely because the banks sold the loans over and over and the number of foreclosures were voluminous.

  • rocket Jun 5, 2013

    "The banks knowingly made loans to people they knew could not pay."

    Then the individuals and the banks share the responsibility. The banks should have been allowed to go bankrupt and the individuals that can't pay should have their homes foreclosed. Instead they both got bailed out and the people that live within their means and pay their mortgage on time each month got nothing.

  • Mojo Jun 5, 2013

    The banks knowingly made loans to people they knew could not pay. The banks used the house loan ie: mortgage document (a financial document) to bundle with individuals credit card debts, car loans, student loans, etc and into a Collateralized debt obligations (CDO). These were sold to other banks around the world at inflated prices. The banks that made these actually knew they would fail and made bets against them hence making even more money. The brillant part on the banks part was they were ripping off everyone: the home owner (making payments on a house the bank will get back), foreign banks buying financial instruments that were literally worthless, making profit from betting against said CDO's to fail. These banks they could not fail b/c they are too important or too big financially to fail without destroying the entire world economy. The banks knew the US government ie: taxpayer would have to bail them out or bye bye the entire economy.

  • rocket Jun 5, 2013

    "This was more about a massive amount of mixed up or lost paperwork, not simply people not paying/unable to pay their mortgage."

    How does mixed up paperwork result in a person paying their mortgage getting their home foreclosed? If the bank loses the lien, they can't foreclose. If they have the lien they should know what is owed and whether or not the customer is paying.

  • rocket Jun 5, 2013

    "But on subprime loans the banks were taking advantage of the customers that didn't understand. When you get a mortgage now, they are required to double verify that you understand the interest rate and if it's fixed or not and how much your total payments are. They didn't have to do that before. That should tell you something."

    Let the buyer beware. If you don't understand how a mortgage works maybe you are better off renting. The bank is a for profit business, not a babysitter. If they lied to people then I will agree they were in the wrong. Otherwise, the responsibility lies with the consumer.

  • fuzzmom Jun 5, 2013

    rocket, and others, I think you're missing the boat. The bulk of those claims, were about the activities of the banks themselves. Yes, "fault" is on the part of the buyer who for whatever reason couldn't or didn't make the payment. However, the purpose of this money was to assist those who attempted to work with the bank to reduce their payments or otherwise revise their mortgages and keep their homes. People filled out the paperwork, and the banks never responded. In some cases, the banks responded, then lost the paperwork or messed up the paperowrk, and then foreclosed anyway. My understanding is that the number of people in limbo was so massive, in part due to all of the takeovers, that the government had to step in to figure out who owed whom, for how much, and what happened to the paperwork. This was more about a massive amount of mixed up or lost paperwork, not simply people not paying/unable to pay their mortgage.

  • smcallah Jun 5, 2013

    "That is correct. Now if you can show me where a bank FORCED someone at Gunpoint to accept a mortgage, then I will agree the bank in that instance is to blame. "

    Now if you can show me where the person who got the mortgage FORCED the government and the bank at gunpoint to give them the loan, then the bank can get out of this blame....

    Anyway, the banks were as close to lying to customers as possible. Just because YOU didn't get a subprime loan and don't know what the people were told doesn't make the banks have no blame. I have a regular mortgage, I know what went into it and understand the terms. But on subprime loans the banks were taking advantage of the customers that didn't understand. When you get a mortgage now, they are required to double verify that you understand the interest rate and if it's fixed or not and how much your total payments are. They didn't have to do that before. That should tell you something.

  • smcallah Jun 5, 2013

    "It is nice to see that Government shake down pay off for the people that directly contributed to the financial meltdown. I feel like a total sucker. I actually paid my mortgage. What an id iot I was for doing that. Guess I should have joined the low life crew to get my handout."

    Can you tell me how'd you be better off without your home's equity and only $1480 to show for it?

    How is that getting a handout?

    "Man, if I stop paying for this house, I'll lose all the money I put into it, I'll have to find somewhere new to live, and maybe, just maybe, in 2 years they'll give me a check for $1480!"

    Is that how you think the thought process went for these people?

    The people would have to somehow magically know that in the future that the government would sue the banks that did the loans and that they'd get money. And then they'd have to decide that having that small amount of money is better than having a house to call your own that you already paid equity into.

  • rachel Jun 4, 2013

    if you have a home equity line of credit, even if it went to repair the house, if it was from another bank or credit union, they will still want their money-and I agree with you happy2.0-but there is no way to get out of it unless you want to declare bankruptcy

  • whatelseisnew Jun 4, 2013

    "So the gubment gets 50% blame, and the homeowner the other 50%? What percent of the blame goes to the banks, none?"

    That is correct. Now if you can show me where a bank FORCED someone at Gunpoint to accept a mortgage, then I will agree the bank in that instance is to blame.

    ""Gee, we never should have loaned you the money in the first place, then we took your home""

    Actually until you satisfy the lien against the home it is not YOUR home. Go check the county records. The records will show the property has a lien against it. The terms of that lien ALLOWS the lender to take the property in lieu of payment. By the way, it works the same way for a car loan. Until you pay the own off, YOU do not own that car. Amazing how people assume ZERO responsibility for their lousy behavior.

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