Here is a first read on the mortgage settlement for California and Bay Area home owners
Mortgage deal could bring billions in relief
On Thursday, federal and state officials announced a $26 billion foreclosure settlement with five of the largest home lenders. California is expected to receive approximately $12 billion in principal write-downs, including through short sales, over the next three years, according to the state attorney general’s office.
- The deal settles potential state charges about allegations of improper foreclosures based on robo-signing, seizures made without proper paperwork.
- The settlement sets up a federal monitor to oversee the process and try to prevent the challenges that tripped up many homeowners seeking help in earlier programs designed to address the housing crisis.
- Most of the relief will go to those who are underwater on their homes. That relief will come over the course of the next three years, with banks having incentives to provide most of the relief in the next 12 months.
- At least $17 billion will go to reducing the principal owed by homeowners who are underwater and behind on their mortgages.
- Up to 750,000 other underwater homeowners who are current on their mortgages will be able to refinance their current loans at lower rates. They will not receive a reduction in principal, but with mortgage rates near record lows, they could receive substantial savings on their monthly payments.
- Approximately $1.5 billion will go to homeowners who had their homes foreclosed upon between Jan. 1, 2008 and Dec. 31, 2011, and who meet other criteria. They will receive up to $2,000 each.
- The five mortgage servicers that are parties to the settlement include Bank of America, JPMorgan Chase, Citigroup, Wells Fargo, and Ally Financial (formerly GMAC).
From an article in today’s San Francisco Chronicle by Andrew S. Ross:
According to estimates from the California attorney general’s office, homeowners in the nine-county Bay Area are due to split $3.1 billion of the $18 billion to be distributed statewide. Alameda County is down to get the most – $757 million – followed by Contra Costa County ($651 million) and Santa Clara County ($588 million).
San Francisco should be receiving $147 million, according to the attorney general’s spreadsheet.
All nine Bay Area counties will be getting something from the deal, including Marin ($50 million), and Napa ($79 million).
In my humble opinion and from what I have read, this will help only a few who truly need help and the amounts will not be significant. There are too hurdles for qualifying for the relief and many who would have qualified have moved on.
Thank you for reading this post. If I can ever be of help in finding you the perfect property here in the Napa Valley, please email me at Curtis@NapaValleyAddress.com
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