National Mortgage Settlement funds being sent to borrowers

CHARLESTON – More than 2,600 West Virginians will receive checks from 2012’s National Mortgage Settlement in the coming weeks, state Attorney General Patrick Morrisey announced June 4.

A total of 2,664 checks will be mailed June 10-17 to state residents who experienced a foreclosure sale between Jan. 1, 2008 and Dec. 31, 2011. The checks have an approximate value of $1,480.

“This is great news for West Virginians who were negatively impacted by the mortgage crisis in recent years, particularly because the amount they will receive is higher than the $840 originally anticipated,” Morrisey said.

Five banks agreed in February 2012 to pay $25 billion to 49 states, with the majority going to California. The banks were Bank of America, Citigroup, JPMorgan Chase, Wells Fargo and GMAC.

The settlement, in which the federal government also joined, instituted new protections for homeowners and nationwide reforms to mortgage servicing standards while leaving the door open for legal remedies for mortgage-related misconduct.

The probe, which began in October 2010 with inquiries into so-called “robosigning” practices, later broadened into identifying and addressing additional alleged improper foreclosure practices.

Iowa Attorney General Tom Miller led settlement negotiations. Oklahoma was the only state that didn’t join in the settlement.

Last year, former Attorney General Darrell McGraw said at least $33.8 million would be available to West Virginia. He used some of the funds on advertising, workshops around the state and a satellite office in Martinsburg that will be funded for three years.

More than $18 million will go to loan modifications and benefits to state homeowners currently in default or foreclosure, more than $5 million will go to free refinancing for “underwater” but current state homeowners and another $6 million will go to foreclosure and mortgage assistance and prevention programs in the state, his office said last year.

“These payments serve two purposes,” Morrisey said. “In addition to compensating borrowers for servicing abuses that happened in the past, they also are a part of our efforts to hold banks accountable and stop these practices through the settlement’s tough new mortgage servicing standards.”

Those who receive payments will not be prohibited from seeking relief through a separate lawsuit.

According to Rust Consulting, some borrowers will receive less than the full amount if they divorced or separated and no longer live at the same physicial address.

From the West Virginia Record: Reach John O’Brien at jobrienwv@gmail.com.