Tennessee homeowners are benefiting from the National Mortgage Settlement, according to a preliminary report released Wednesday.
“Although this preliminary report represents a good start by these five servicers, there is still a lot more work to do,” Tennessee Attorney General Bob Cooper said in a prepared statement. “Our office is committed to making sure that homeowners receive the benefits they are entitled to under the settlement.”
Homeowners can call toll-free 855-876-7283 to speak to a representative who can direct them to a free foreclosure prevention counselor and explain various housing assistance programs.
The hotline is available to all struggling Tennessee homeowners, regardless of who services their loan, although not everyone qualifies for this type of relief.
According to the National Mortgage Settlement's website, 49 state attorneys general and federal leaders reached an agreement with the country's five largest loan providers to give as much as $25 billion to "distressed borrowers," as well as direct payments to states and the federal government.
The agreement is the largest multistate settlement since the Tobacco Settlement in 1998, according to the website.
The agreement came after state and federal investigations found that the five loan servicers routinely signed "foreclosure-related documents outside the presence of a notary public and without really knowing whether the facts they contained were correct," which is illegal.
The settlement gives benefits to borrowers whose loans are owned by the banks involved in the settlement. Those are Bank of America, JPMorgan & Chase, Wells Fargo, Citigroup and Ally Financial/GMAC.
According to the report, Tennessee homeowners have received more than $36 million in relief between March 1 and June 30.
Borrowers are either given loan modifications, refinances or facilitated short sales, according to a news release from the state attorney general's office.
Officials expect the total benefits to Tennessee residents to be $140 million.
About 2,000 homeowners in Tennessee have either already gotten or are in the process of receiving relief so far.
"The report comes at a time when the housing market in Tennessee and throughout the country has shown signs of improvement and increased stability," according to the news release. "One aspect of the settlement that could sustain that momentum are the provisions requiring the servicers to make timely decisions regarding short sales. In Tennessee, servicers have already approved 437 short sales at a benefit of over $22 million to homeowners in just four months, according to the report."