For the specific set of borrowers who were facing foreclosure by the nation’s five largest banks, a deadline of Friday looms to file claims under last year’s landmark National Mortgage Settlement.
The $25-billion settlement agreed to by 49 state attorneys general, federal agencies and the nation’s five biggest banks after it was revealed those financial institutions had used flawed paperwork and other faulty practices to repossess homes.
The settlement introduced new mortgage servicing standards and provided for a wave of loan modifications that include principal reductions and short sales. Some borrowers also qualify for monetary relief. Those who do qualify for cash were mailed notifications and claim forms last year, according to the National Mortgage Settlement website.
Those who qualified were borrowers who lost their homes to foreclosure from Jan. 1, 2008, to Dec. 31, 2011. Their loans must have been serviced by one of the big banks that were parties to the settlement. Those banks were Bank of America, Ally Financial, Citi, JPMorgan Chase and Wells Fargo.