What Does the Mortgage Aid Settlement Mean?

People who were foreclosed upon by one of five mortgage banks -- Bank of America (which includes any Countrywide mortgages), Wells Fargo, Chase, Citigroup and Ally Financial --  between 2008 and 2011 could be entitled to a share of the recent $25 billion settlement.

Sounds great, right? But there are issues. The settlement will not apply to any mortgages guaranteed by Fannie Mae or Freddie Mac. It also appears that it is going to take time to sort out exactly who is entitled to relief and how much will be paid to each homeowner. Initial analysts project that it will take six months to a year before any funds are distributed and it is likely that individual payments will not exceed $2,000.

Another component to the settlement allows some current homeowners who are underwater (i.e., owe more on their mortgages than their homes are worth) to refinance their mortgages and obtain a lower interest rate.

If you think you might be entitled to relief you should stay on top of this. The StarTribune has provided a list of resources to get more information.

About the author: Dan Cooke