Foreclosure bank settlement money to help thousands of California residents

5:39 PM, Sep 25, 2012   |    comments
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SACRAMENTO, CA - Earlier this year, Kenneth Hamilton, who lost his home of 14 years to foreclosure.

Now, he and more than 430,000 Californians who've been foreclosed on may be getting a check in the mail around the middle of next year.

"I'm excited because I sure need it," Hamilton said.

California Attorney General Kamala Harris announced that the refund process just began for certain foreclosure victims as part of the National Mortgage Settlement, where banks agreed to a $25 billion settlement.

MORE: National Mortgage Settlement Website

About $1.5 billion of the settlement aims to compensate borrowers who were wrongfully foreclosed upon.

"This is for people whose foreclosure were either done improperly, who might have been dual-tracked, which means they applied for a loan modification at the same time they were foreclosed upon or if they suffered financial hardship that the bank didn't take into account," Attorney General's Office spokesperson Lynda Gledhill said.

This is just the first wave of money that will be distributed from the $25 billion pot. There will be more settlement money that will be distributed to help people who lost their homes of need help keeping a hold of their homes. Gledhill said it will take time to distribute/use the settlement pot.

While there are millions of Californians who were foreclosed on, only 430,000 are eligible for the settlement money. The money only applies to customers who were foreclosed on between 2008 and 2011 and had a mortgage with the five banks involved in the settlement, including Wells Fargo and Bank of America.

The claim forms will be landing in mailboxes over the next few weeks.

"We really should be compensated," Hamilton said. "I believe the banks knew what they were doing when they did it."

The Attorney General Office's worries that people might think their notices are a scam, but there's one way to tell they're not.

"What's key about this claim form is that it will not ask you for your financial information," Gledhill said. "The banks already have that."

It's unclear how much people are going to get, but the smallest check will be for $840. It could be more, depending on how many of the 2 million people eligible nationwide actually file a claim.

By Nannette Miranda
ABC7

ABC7/KGO

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