In the aftermath of the 2008 recession, mortgage debt affected millions of Americans, many of whom faced foreclosure. As the foreclosure crisis impacted the real estate industry, the overall economy struggled as well. To help homeowners struggling with mortgage debt, especially those who faced foreclosure, the federal government decided to appropriate funds to help alleviate the situation. Now, foreclosure checks are being dispersed to help those who faced foreclosure.
Federal Checks to Compensate Homeowners
These federal checks will be sent to those homeowners who faced foreclosure between January 1, 2008 and December 31, 2011. The homeowner must also have had their mortgage loan handled through one of the following providers: Wells Fargo, Citibank, Bank of America, JPMorgan Chase, or GMAC/Ally. Approximately $25 billion has been sealed in a national agreement to compensate homeowners and resolve foreclosure abuses. It’s expected that 962,000 Americans will receive a check.
Some of the states that will receive the highest number of these foreclosure checks include:
· Illinois. Approximately 30,000 state residents lost their homes to foreclosure under the above conditions and will receive a total of $43.3 million in payments. Checks will average $1,480 each.
· Michigan. Michigan homeowners who faced foreclosure will receive a total of $107 million, according to the state attorney general’s office. The average check will total $1,480 per homeowner. A smaller number of borrowers also received an “initial check.” Michigan has already received over $1 billion in aid in accordance with the Homeowner Protection Fund.
While there will be homeowners in every state who receive these checks, Illinois and Michigan were two of states most affected by the mortgage debt crisis. These checks are part of a settlement, which found that the five mortgage services signed foreclosure documents without notarizing them. Because these legal documents were abused and misused (or used outside of their intended purpose), homeowners who struggled with mortgage debt and faced foreclosure will be compensated.