Tennessee residents who submitted a valid foreclosure claim through the National Mortgage Settlement will share in $27 million to be distributed next week to Tennesseans hurt by abusive mortgage servicing activities during the Great Recession.
The average recipient will receive $1,480, according to the Tennessee Attorney General's office.
Eligible borrowers include those who lost their home to foreclosure between Jan. 1, 2008 and Dec. 31, 2011 and had their mortgage serviced by one of the settlement's five participating mortgage servicers. They also needed to submit a valid claim form. The participating servicers include Ally (formerly GMAC), Bank of America, Citi, JPMorgan Chase, Wells Fargo.
"These checks come from a $1.5 billion payment pool we negotiated and set aside as part of the National Mortgage Settlement," Tennessee Attorney General Bob Cooper said in a statement today. "Although we realize this does not make up for the stress and frustration many borrowers suffered, these payments will help compensate foreclosed borrowers for the mortgage servicing abuse that they likely endured."
Cooper said the final amount is nearly double the initial estimate of $840 per recipient. The payments do not limit a borrower from seeking relief through a separate lawsuit or other claims.
Nationally, the settlement administrator will mail valid claim payments next week to 962,278 loan recipients.
"These payments are part of our efforts to hold the banks accountable through the National Mortgage Settlement," Cooper said. "In addition to compensating borrowers for the servicing abuse that happened in the past, we're trying to stop these practices through the settlement's tough new mortgage servicing standards."
In February 2012, 49 state attorneys general and the federal government announced the historic joint state-federal National Mortgage Settlement with the country's five largest mortgage servicers. Preliminary data shows that, so far, the servicers have provided more than $50 billion in direct settlement relief to borrowers nationwide.
Every borrower who filed a claim will receive a letter regarding their outcome. Borrowers with questions about their National Mortgage Settlement payment should call the settlement administrator at 1-866-430-8358.