Home > Uncategorized > Payments to homeowners wrongfully foreclosed on approach $2.2 Billion

Payments to homeowners wrongfully foreclosed on approach $2.2 Billion


$2.2 Billion in Payments to Homeowners

According to the Office of Comptroller on Currency, More than 2.4 million checks related to the Independent Foreclosure Review have been cashed or deposited by homeowners who were wrongfully foreclosed on for nearly $2.2 billion through May 16, 2013.

For more information, check out the OCC’s website at: http://www.occ.gov/news-issuances/news-releases/2013/nr-occ-2013-85.html


As far as payment amounts go, recent news articles have claimed the payments have been much less than promised. Here’s a humorous article from the American Banker discussing Jon Stewart of the Daily Show’s take on the settlement : http://www.americanbanker.com/people/jon-stewart-rips-foreclosure-settlement-1059018-1.html


What Michigan is doing with its share of  the National Mortgage Settlement

The State of Michigan has taken its share of $25 billion in monetary sanctions and relief from a major settlement with the National Lenders.  According to the State of Michigan’s website: “Michigan residents are expected to receive approximately $780 million in benefits, including a $97 million payment directly to the State of Michigan.” http://www.michigan.gov/ag/0,1607,7-164-34391-282192–,00.html

The $97 Million payment has been distributed into a “Homeowner Protection Fund” as follows:

  • Foreclosure Rescue Scam Victim Restitution – $7.5 million. Many Michigan residents have fallen prey to foreclosure rescue scam artists who offered to help citizens save their homes.  This fund will provide restitution payments of up to $3,000 per person for victims of foreclosure scams.  Eligibility criteria to determine qualifying cases will be established at a later date. 
  • Assistance for Veterans – $5 million.  The men and women who served our country also have been affected by poor mortgage servicing and foreclosure practices.  These funds will provide targeted relief for military servicemembers unable to qualify for existing programs.
  • Michigan Attorney General Home Protection Unit – $6 million.  These funds will allow Schuette’s office to ramp up investigation and prosecution of foreclosure-related crimes.  This unit has brought charges in 28 cases since 2009 and there are approximately 69 cases currently under investigation.  These funds will allow for additional investigators and prosecutors to combat foreclosure related crimes.  
  • Blight Elimination – $25 million.  These funds will be dedicated to blight elimination efforts throughout Michigan.  $10 million will be allocated for blight elimination in the city of Detroit and $15 million will be allocated for use throughout the rest of the state.  Given that blighted property contributes to an environment conducive to crime, targeting blight elimination in these areas will further efforts to reduce crime. 
  • Foreclosure Counseling for Homeowners – $20 million.  The Michigan State Housing and Development Authority (MSHDA) and Michigan State University Extension Offices will use these funds to expand their much-needed, free homeowner counseling services for citizens seeking to avoid foreclosure.
  • Housing and Community Development Programs – $3.7 million.  These funds will be allocated to the Michigan Housing and Community Development Fund which develops and coordinates public and private resources to meet the affordable housing needs of low income households and revitalizing downtown areas and neighborhoods in Michigan.
  • Grants to Help Homeowners Refinance – $5 million.  These funds will allow The Michigan State Housing Development Authority (MSHDA) to provide Grants to help pay the closing costs of citizens who utilize the Home Affordable Refinance Program (HARP).  Eligible citizens will receive assistance paying closing costs associated with refinancing their home.
  • Assistance to Homebuyers – $15 million.  These funds will assist both service members and non-service members by providing grants to offset the purchase price of a home.  Service members may be eligible for grants up to $5,000 and non-service members up to $3,000.  Eligibility criteria to determine qualifying cases will be established at a later date.
  • Education Achievement Authority – $10 million.  These funds will be used by the Education Achievement Authority (EAA) to help improve performance of Michigan’s lowest performing schools.

Taken from the State of Michigan website: http://www.michigan.gov/ag/0,4534,7-164-46849_47203-282801–,00.html


An Apparent End to Michigan’s 90-Day Moratorium on Foreclosures

On a final note –  the state of Michigan’s 90-Day Moratorium on Foreclosures, for lenders who desire to foreclose by advertisement, is set to sunset next month, June 30, 2013.  As of today, I found no new legislation that has been proposed that would  extend that sunset date – much to the relief of lenders and loan servicers.   The sunset date has been extended several times – lenders, servicers, and other real estate professionals, as well as struggling homeowners, should be aware of this looming date.



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