Wisconsin homeowners to get $140M under settlement

GREEN BAY - A major mortgage settlement has been reached in response to improper foreclosure practices by the nation's five largest lenders.

Forty-nine states will get part of roughly $25 billion to compensate victims of foreclosure abuse.

• Click here to view a nationwide mortgage deal timeline

The money will help them refinance and pay off their home loans.

The deal affects loans from 2008 through last year.

About $140 million will come to Wisconsin, which Governor Scott Walker says will be put to good use.

"It will be individuals who are currently facing challenges because of that. Have not fully been foreclosed upon, but are facing those challenges. This is good news for them in particular. This will help them get back on their feet again," said Walker.

The settlement could help hundreds of homeowners in Northeast Wisconsin who are facing a mortgage crisis.

Hundreds of area families are at risk of foreclosure or are somewhere in the foreclosure process where there's been a filing or they're heading towards the auction, the sheriff's sale," Noel Halvorsen, Executive Director of Neighborworks Green Bay.

Some relief is on the way. The nationwide mortgage settlement forces the five largest mortgage lenders - Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial - to reduce loans.

"There will be more resources available for families who are underwater where their, they've got the house, maybe they can afford the payments on the thing, but they haven't been able to refinance to some of these low rates that we've got today," said Halvorsen.

Of the $140 million Wisconsin will receive - about $60 million in benefits will come from loan modifications and other direct relief.

About $17 million will go to people whose homes were foreclosed on and suffered servicing abuses between 2008 and the end of last year.

Around $31 million will be available in refinancing benefits - and about $31.6 million will be used for future lawsuits and additional relief to borrowers.

Borrowers should contact their mortgage lender for details about how to qualify.

The deal also promises to re-shape long-standing mortgage lending guidelines. It will make it easier for those at risk of foreclosure to make payments and keep their homes.

"It's definitely a start in the right direction for our clients," said foreclosure attorney Mike Demerath.

Demerath says the program will help homeowners who have been trying to work with mortgage lenders without success.

"There's supposed to be one main contact that you would deal with so you're not talking to a different person every time also they actually have to give you a response in a timely manner and before they actually do the foreclosure," said Demerath.

One lender involved in the settlement - Wells Fargo - says it acknowledges the missteps it made. The company adds it is already making changes as part of the agreement.

"We encourage them to call us today we can start to look at if there are options that might be available, and when the new programs come or the expanded programs are available starting March first we will look at them to determine if they may qualify for those as well," said Wells Fargo spokesperson Tom Goyda.

Neighborworks Green Bay is warning homeowners about scams that may arise from this mortgage settlement.

Officials say if somebody initiates the contact to help you with your mortgage, you want them to be a Housing and Urban Development certified counseling agency.

You should also make sure you're not paying any fees.

• Click here for a list of mortgage settlement resources

The settlement doesn't prevent homeowners or investors from pursuing civil lawsuits against the five lenders. It also does not grant any immunity from criminal offenses.

The deal is the biggest involving a single industry since a 1998 multi-state tobacco deal.

Borrowers should contact their mortgage lender for details about how to qualify under the settlement. The state Department of Justice has also posted information at its website: www.doj.state.wi.us.