Roughly $25 billion in relief for distressed borrowers, states and federal government…

In February 2012, 49 state attorneys general and the federal government announced a historic joint state-federal settlement with the country’s five largest mortgage servicers:

• Ally/GMAC
• Bank of America
• Citi
• JPMorgan Chase
• Wells Fargo

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 multi-state settlement since the Tobacco Settlement in 1998.

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 owned by the settling banks as well as to many of the borrowers whose loans they service.

What does this mean for you?

For homeowners and those whose homes were foreclosed between January 1, 2008 and December 31, 2011, the deal means that you could receive a cash payment, a principal write down or refinancing with the money from the settlement, depending on your specific situation. If you received a letter in the mail, follow the instructions to register.  The deadline to  make your claim is January 18, 2013!

For more information and updates, please visit their official website.