Thursday meeting will detail mortgage settlement benefits for homeowners

Help is coming to Missourians with mortgage troubles.

This week Missouri Attorney General Chris Koster's office is sending assistant attorneys general to every county in the state to spread the word on how homeowners may benefit from the national mortgage settlement with the country's largest lenders.

Meetings will be held at noon and 6 p.m. Thursday in the Commissioners Room of the County Administration Building in Jackson.

People who were foreclosed upon by Bank of America, Citigroup, JP Morgan Chase, Wells Fargo or Ally/GMAC Financial between Jan. 1, 2008, and Dec. 31, 2011, are eligible to receive a payment of up to $2,000, but that amount depends on the number of people who respond.

This week's meetings are aimed at getting as many people as may qualify to register with the Attorney General's office. These individuals should also contact the bank that foreclosed on them.

"We are enlisting the help of consumers to ensure we are able to bring into Missouri what we're entitled to under the terms of this settlement," said Doug Ommen, chief of the consumer protection division of the Missouri Attorney General's office. "We want to do what we can to make sure that eligible Missourians receive that penalty amount."

He estimates as many as 25,000 Missourians may have been the subject of abusive foreclosure servicing processes.

Ommen, who was involved in negotiating the national settlement, said one of the most abusive foreclosure servicing practices he's seen is called dual tracking. Customers who called their bank were told by one department of the bank to stop making payments to help make them eligible for loan modification, while at the same time, another arm of the bank was sending them a notice of foreclosure. "That advice made matters worse and put them at risk of foreclosure," Ommen said.

The settlement also offers relief to homeowners who aren't yet in foreclosure, but are headed there.

Homeowners who are 30 days or more behind on their mortgage and their homes worth less than they owe on their mortgage with one of the five banks may be eligible to reduce the amount they owe on their house, refinance to lower their payments, sell their house for less than they owe the bank or suspend or lower their payments if they are unemployed.

For homeowners who are current on their payments, but have an interest rate higher than 5.25 percent and their home is worth less than they owe to one of the five banks, may be eligible to refinance and reduce monthly payments by at least $100.

Those in active duty military service, or who were when their mortgage troubles began, may also qualify for help as part of the settlement.

This is the largest multistate settlement since the tobacco settlement in 1998. The national mortgage settlement involved 49 states and the District of Columbia. Oklahoma did not participate.

In addition to the relief given to individual consumers, states will receive penalties and compensation for economic harm caused by the unfair and deceptive conduct of these banks. The state of Missouri will receive more than $40 million; how this money is spent will be determined by the governor and the legislature, Ommen said.

A national settlement administrator will be selected later this spring to carry out the claim process. The cash payments to foreclosure victims and loan modifications will be handled directly by the banks involved. They may not begin until 2013 and may take until 2015 to be fully implemented.

The settlement also includes the first nationwide reforms to servicing standards, which banks must follow in the foreclosure process. These will benefit all consumers, regardless of whether their mortgage is currently owned by any of the five banks, Ommen said. One of reforms requires banks to provide a single point of contact throughout the foreclosure process.

"We've received over the last several years over 1,000 complaints from consumers who struggled to figure out even who to talk to at the bank," Ommen said. "They would get misdirected or they would get contradictory advice. Banks have certain requirements of behavior we now can enforce and we want to make sure consumers know that."

In Cape Girardeau County, the number of foreclosures has been falling.

In 2011, foreclosure documents were filed for 172 properties, according to Recorder of Deeds Scott R. Clark. That is the lowest number of foreclosures recorded since 2008.

So far this year, foreclosure documents have been filed on 33 properties, he said.

In addition to registering with the attorney general's office at Thursday's meetings, those who think they may qualify under the settlement can register online at www.ago.mo.gov/mortgagesettlementinfo.htm or call the mortgage hotline at 855-870-7676.

mmiller@semissourian.com

388-3646

Pertinent address:

1 Barton Square, Jackson, Mo.