The historic $25 billion national mortgage settlement reached in February could result in direct payments to more than 12,200 Idaho borrowers. That’s how many Idahoans are eligible to share in nearly $10 million in direct payments from Bank of America, J.P. Morgan Chase, Wells Fargo, Citigroup and Ally Financial.
The borrowers were on the receiving end of “loan servicing errors” that may have led them to lose their homes to foreclosure between 2008 and 2011, the Idaho Office of the Attorney General says.
Idaho’s total share of the mortgage settlement is just under $114 million. The nearly $10 million that will be distributed directly to borrowers is part of that total amount.
It came as a surprise to the state attorney general’s office that so many Idahoans are eligible for direct payments. “Initially we had thought there were going to be about 5,000 homeowners,” spokesman Bob Cooper explained, “but when the five servicers got through their records, it turned out there were about 12,000.”
That larger total will result in smaller payments to borrowers. While it was initially thought that those eligible would receive between $1,500 and $2,000, it now appears that those who lost their homes to foreclosure will now receive a minimum of $840.
“I think in any settlement you want to get more and the other side wants you to get less,” Cooper said of the amount available to compensate homeowners. “What it really emphasizes to me is how severe this housing crisis was in Idaho.”
The national mortgage settlement administrator mailed notices to eligible borrowers last week. Information packets are to follow. In order to receive payment, borrowers will have to apply by January 18 of next year. Checks will be sent after that date.