Which Line is for the $2,000 Payment?

By March 20, 2012Housing Market

In February, US Attorney General Eric Holder announced the unprecedented $25 billion national mortgage settlement with the five largest banks in the US. One of the provisions of the settlement is a $2,000 payment to homeowners who lost their homes to foreclosure.

A month later, people are asking, “When am I going to get my check?”

The answer is, “It depends.”

One thing is for certain. It won’t be this week or this month. It will take up to two months to select an administrator and six to nine months to actually get the ball rolling.

Then you have to meet a few other requirements.

  • Did Bank of America, Citigroup, JPMorgan Chase, Wells Fargo or Ally Financial service your loan? If so, good, because the settlement only applies to them. But even then, you’ll only qualify if your loan was NOT a government-backed mortgage (such as FHA, VA, Fannie Mae and Freddie Mac loans), and which account for over half of home mortgages.
  • Did you lose your house between Jan 1, 2008 and Dec 31, 2011? If so, good, because the settlement only covers those four years. (This period is for when the house went back to the bank or an investor, not the loan origination date, as some reports indicate.)
  • Are you feeling lucky? The $1.5 billion set aside for these payments will cover 750,000 borrowers. We have no numbers on how many foreclosures these five lenders completed from 2008 to 2011, but there were roughly 3.8 million foreclosure sales during that period, over five times as many as will receive payments.

According to the national mortgage settlement site, eligible borrowers will be contacted. Given that everyone who is entitled to these checks has lost their home and have now moved, it will be interesting to see if they can actually find you. Hopefully you filled out a Change of Address with the US Postal Service.

Other provisions of the settlement include:

  • $3 billion for refinancing lower interest rates for homeowners who are current on their payments but are underwater on their loan.
  • $17 billion for principal reduction and short sale assistance for homeowners who are in default.

While this “unprecedented” settlement will certainly help a few individuals, it is, as we’ve said before, an absolutely meaningless amount of money when compared to the $4 Trillion in excess mortgage debt that created during the credit bubble.


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  • Victor E says:

    Will we qualify for the $2,000 payment if we lost our house on a short sale, done it to avoid foreclosure.

    Your comments will be greatly appreciated.

    Thank you.

    • Michelle says:

      Hi Victor,
      The payment if for those that were unable to avoid foreclosure. If you sold your home as a short sale you would not qualify.

    • julie says:

      Nice to know i’m not alone! Citimortgage screwed us around with lost paperwork and we ended up doing a short sale. I’m happy we found a buyer but I still feel they should pay somehow. Frustrating! I originally heard there WAS 2000 in compensation for those who with short sales. God Bless and hope you are in a better place now!

    • joe b says:

      citibank refused us loan mods also started foreclosure
      procedure when i actually was not in default status then they agreed to a short sale ..home was valued at 218,000
      owed 177,000 and sold with a buyers assistance of 15,000 for 135,000…i lost my home due to their refusal for a loan
      modification,plus they were robo signing me…what would be should my settlement be??? can anyone help with this question???

  • Randy says:

    How can I find out if my loan was not a government-backed mortgage? I no longer have any documentation, be it the original loan app or the statements from the servicers.


  • Jan Cameron says:

    I clearly cannot get my head around the settlement that the banks are offering. My loan was a Fannie Mae Loan. I brought a short sale/all cash! for $285K. Bank of America turned the offer down. Now the house is sitting on the market vacant since last August. Price has been lowered to $310K. I just don’t their thinking. I finally gave up when I was turned down for a loan mod., short sale. I moved out in Aug. 2011. This is just a mess. I went through every program offered like clock work and have all the paperwork. I feel like a victim because I had a Fannie Mae Loan.
    Now the banks are offering refinance programs and principal write downs.


  • Oscar Mendoza says:

    Hello, my condo was foreclosed and sold at auction in January 2012. I believe that was the date, do I qualify for the $2,000? How do I find out the exact date of foreclosure?

    • Michelle says:

      Hi Oscar,
      At this time the settlement does not cover any foreclosures in 2012. It is believed the the problems were corrected and the recent foreclosures were all properly handled.

  • bradley b says:


    • Michelle says:

      Hi Bradley,
      You need to reach out to a local loan officer and inquire about the HARP II program. This latest program may help you refi to todays low interest rates.

  • Lori says:

    Hi. We had our house foreclosed on within one month of non-payment per B of A’s rep request, so we could qualify for a loan mod. We had family help and pay the attorney fees, foreclosure fees, etc. to not be foreclosed on. B of A sent us a notice that we were included in the settlement act, and I proved all correspondences, sent a copy of the cashiers check that had to be sent within 2 weeks, or we would lose our home. After only missing ONE payment…We had to pay over 1800 in just B of A’s attorney fees. I think we should be eligible, but I am not sure, since we paid them off, but the method they used was unethical business practices to say the least.

  • Daniel S. says:

    Hello Michelle,

    Thanks for all of the info. I definitely qualify but I have moved twice since the foreclosure and was wondering how do I find out if I am being missed with regards to being “notified”. I filed a notice with my state’s Attorney Generals Office but I would really like to find out who the administrator is for Michigan and Citibank, do you have any advice?

  • Cyndi J says:

    I was forced into a short sale in 2009 but I wasn’t allowed to sell that way until they started the foreclosure process. Does that mean we would have or still can qualify?

  • cindy says:

    Just wanted to throw this out there too. Even if you receive money from either the National Mortgage Settlement (which looks to be about $2,000 each) or the amended/scraped Independent Foreclosure Review (which could be from anywhere from a few hundred to $125K each) you will be required to claim it on your tax return as income. It blows my mind that the government can turn around and tax you on something that is supposed restitution for being financially harmed. In reality your receiving much less than anything I’ve read is stating.

  • Angelique Rider-Mitchell says:

    So now, as if holding my family together thru all this since foreclosure hasn’t been tough enough, I’m going to have to teach myself relevant case law & mount a suit against one of the biggest banks in the world in my spare time?!?! I haven’t eaten a meal today d/t financial hardship, where the hell am I going to summons this forward moment from? It leaves me wondering if just once during my adult life couldn’t something neccessary for my familys basic survival not be such an arduous task. This is America for Gods sake! You can bet your ass, it wasn’t a strain at all to the banks that screwed us when they plucked our properties out from under us. Yet for people who were & cont to attempt to do the right thing, the legal thing we’re the ones likely to be crushed by the wheels of Justice?!?! I want to puke.

  • rolando says:

    hi I was foreclosed on 2010. And I filed bankruptcy protection. And then they took me to court and took the house back. They wanted to charge me so many penalty and lawyer fee so I let him have it .I file for review around how much you think I could get.

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