Home foreclosures were rampant in Idaho and throughout the nation from 2008-2011 and now Idahoans who lost their homes during that time may be eligible for payments from the government under the National Mortgage Settlement.
In February, Idaho Attorney General Lawrence Wasden joined in a $25 billion nationwide settlement with the five national banks that did the most mortgage loans during this time period: Ally, GMAC, Citi, JP Morgan Chase and Wells Fargo. One provision of the settlement requires that the banks compensate customers for loan servicing errors that may have resulted in the customers losing their home to foreclosure.
At the time the settlement was agreed upon, it was estimated that 5,000 Idaho borrowers would be eligible for payment, but that number has increased to over 12,000. Teresa Rigby manager of Alliance Title Co. in Blackfoot reports that there were 344 trustee deeds recorded during this time period. Rigby explained that this number reflects foreclosures that were actually completed and is not reflective of those that may still be in the works.
"A complete foreclosure should only take about 180 days but some drag on for three or four years."
Michelle Reay, manager of First American Title Co. in Blackfoot, agrees with those numbers, adding that another 58 trustee deeds have been recorded so far this year through Aug. 31.
"Southeast Idaho hasn't had the extreme highs and lows in the housing market like other areas of the country have experienced," Reay said. "I think we're a little more stable because of the strong agricultural base that we have here."
Mortgage settlement packets started going out to Idaho borrowers on Monday and will include a letter from Wasden, a claim form and instructions on how to apply for payment.
"This payment is not intended to compensate Idahoans for the loss of their homes," Wasden said. "Rather, it is a step toward accountability for unfair business practices that harmed Idaho homeowners. I remain committed to improving the mortgage servicing industry for the benefit of Idaho's current and future homeowners."
The minimum amount borrowers will receive is $840. The actual amount will be based on the number of borrowers who return their claim forms. In order to receive a payment, borrowers must return their claim forms (or apply online) before Jan. 18, 2013. Checks will be mailed out after the deadline.
Borrowers who believe they may qualify for a payment, but do not receive a claims packets, should call 866-430-8358 or go to the Attorney General's website at www.ag.idaho.gov and click on the "mortgage and foreclosure" button.
Wasden warns all homeowners to be aware of settlement-related scams. Do not provide personal information or pay money to anyone who calls or emails you claiming they can provide settlement related assistance. Consumers should report any suspicious activity to the Attorney General's Consumer Protection Division at 1-800-432-3545.
The Associated Press contributed to this report.