Minn. Gets $280M In National Mortgage Settlement

ST. PAUL, Minn. (AP) — State officials say Minnesota mortgage borrowers will be eligible for a total of $280 million from a national settlement between states and the country’s biggest mortgage lenders.

Minnesota Attorney General Lori Swanson and Commerce Commissioner Mike Rothman announced Minnesota’s settlement Thursday. Five major U.S. banks agreed to pay about $26 billion to reimburse American homeowners.

The deal requires the banks to reduce loans for about 1 million households. Some homeowners will be eligible for direct relief checks. The relief is targeted at mortgage holders who owe more than their homes are worth.

Swanson’s office says in Minnesota, $167 million will go to loan reductions and other relief, and $113 million will go to direct payments to and refinancing help for borrowers.

People with questions about the settlement can call Swanson’s office at 1-800-657-3787.

(© Copyright 2012 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

  • it hurts

    Exhibit A: I pay $200,000 for my home and make regular scheduled payments on time and in full= no reduction for me.

    Exhibit B: You pay $200,000 for same house and make no payments, you get a reduced principle amount? Not Fair!

    Both exhibits assume house was bought at the same time, with the same banking institution.

    Something tells me that I’m bending over and taking it up the ()*()

    • JGE

      That does seem unfair to homeowners like you and I. However, helping those homeowners that can no longer afford their mortgages does help us indirectly. Stopping a bunch of foreclosures in your neighborhood helps to preserve what value is left in your home.

      I think they should offer programs to homeowners like you and I too.

    • Fed Up

      That is exactly what I’ve been saying for a few years now. I just called the AG’s office about it and the first question was “Are you behind on your payments or about to experience a forclosure?” Upon telling them that no, I am not behind, and have never missed or been late with a payment, they pretty much said that there is not much help.
      We are taking it up the ()*(). It’s totally unfair.
      I agree that helping stop forclusures in any fashion is in the best interest for all of us, but in the end, the ones that really are getting worked over are people like you and me in this exact situation.

  • still hurts

    I meant up the ( )*( )

  • James

    It hurts and JGE They Do! It rolls out March 17th!

  • James

    And yes I paid $198,000 for my house at 6.5 % and I will be able to refinance @ 4.2% now. But you can’t apply until March 17th.

    • jGE

      Where can I get more info on that program? Do you have to have a Fannie or Freddie loan?

      • Andrea

        You must have you loan owned by by Fannie or Freddie. You can Google HARP 2.0 for more details. Keep in mind that you have to be approved by an automated system, so even if you meet all the parameters doesnt mean you automatically qualify. Many lenders are either not doing the program or are limited to 105%, but there are a few still going up to 125%.

  • James

    Yes I have a Fannie Mae loan. As long as you purchased before 2009, have a loan owned my Fannie or Freddie, been current for 1 year and NO missed payments and have a credit score above 650 you are eligible. They say 6 months and above 600 but don’t believe that! NO CLOSING COSTS!

    • GH

      Watch out for your mortgage insurance on this. We didn’t want it and somehow the mortgage holder worked it into our loan anyway and now we can’t refinance with anybody. We’ve never missed a payment, make an extra payemtn every year to stay on top of things and we still can’t get a refinance. I hate mortgage companies (Chase Bank is the worst)

      • Andrea

        Mortgage Insurance is required unless you have 20% down on a conventional home.
        Even if you have mortgage insurance you can still refi under the new HARP 2.0 program. The final details will be out on March 17th, but just did mine that was upside down 125% and qualified.
        Let me know if you want the number of a good Mortgage guy

        • GH

          I would love the name and number of a good Mortgage guy. We meet all the requirements to not have mortgage insurance, but it somehow ended up on our loan and now we are fighting to get it back off after 7 years. Makes me wish I was a renter sometimes :)

          • Andrea

            Give Randy a call at 320-295-7004

  • JGE

    I meet all the criteria, except for the Fannie or Freddie part. Boo!

  • Brett

    Agreed that those of use that are responsible actually get hosed in this settlement. I refuse to not pay my bills but because of this there is no help for me.

  • James

    They have waved the PMI restrictions that banks once had!

  • Rion Ellis


    Borrowers who are current, but underwater. Borrowers will be able to refinance at today’s historically low interest rates. Servicers will have to provide up to $3 billion in refinancing relief nationwide.

  • Tim

    “While it releases the five banks from servicing, foreclosure and loan origination lawsuits by state and federal agencies, it does not give them immunity from criminal prosecutions or prevent homeowners or investors from pursuing their own suits.”

    Happy to read this on Chicago Tribune – http://www.chicagotribune.com/business/breaking/chi-robisigning-settlement-to-be-finalized-20120209,0,1608260.story

  • Amazing

    Bummer I meet all the criteria except I’m not a whiny, deadbeat with my hand out looking for someone else to fix my mistakes. Life isn’t fair and it isn’t supposed to be. When the market goes down, and you chose to put little to no money down, you are going to be under water. Now it makes me wish I actually bought more house and put less money down and join the ranks of the deadbeats. Literally like getting something for nothing in the face of all economic principles. We can come up with all the excuses we want and try to shift blame to forces outside our control but at the end of the day you need to fail to get stronger.

    • Kevin

      YOU NEED TO RUN FOR PRESIDENT!!!!!!!!!!!!!!!!!!!

    • JGE

      You really don’t understand how this happened, do you. It was in the bank’s interest to give out loans they knew would fail. They would make bets on loans they knew would fail and made a ton of money on it and as a result destroyed the housing market. I have made every payment, put 20% down and my home is now worth nothing thanks to that greed and deregulation.

    • Mike

      Dear Amazing, You definitely have the whine down.

  • ddk

    Citibank sold my mortgage last December – if under the other conditions apply, will that make me ineligible to re-finance?

    • Andrea

      No problem. As long as you have not refinanced since 2009 the sale of the mortgage doesnt make any difference. Let me know if you want the phone number of a good mortgage guy.

  • Duh. duh. duh. duh?

    ONLY in America can you go in debt, be irresponsible, drop your bills and walk away from your house——–and get public assistance to still keep everything. Bring back the debt prisons!

  • KS

    So what about people like us? We bought responsibly, an amount we could afford even if one of us lost our job, put 20% down, and we paid about $30,000 less than the appraisal came back at the time. Never missed a payment, even in recent hard times. We sold a car and gave up other “luxury” items to be able to make our payments. However, our house is now worth about $15,000 less than our loan amount ($45,000 less than originally “worth”), and we will get no help. We’d probably be better off if we quit paying. :(

  • See BS

    So people who fudged the numbers to buy more home than they can afford are being rewarded?

    • No, banks are being rewarded...

      $26 billion (20 billion is in the form of bank“credits” not cash) is a lot of money but it’s a drop in the bucket compared with the trillions of dollars of household wealth that’s been lost since the bursting of the credit bubble in 2008. Furthermore, $2,000 is a small price to pay to homeowners who lost their homes in illegal foreclosures. The $20,000 mortgage modification is great, except the average deficit for underwater mortgages in America is $50,000. In addition, the $20 billion isn’t coming out of the banks’ pockets; it’s coming from investors and, ultimately, taxpayers. The mortgage principal write-downs are guaranteed to come almost entirely from securitized loans, which means from investors, which in turn means taxpayers via Fannie and Freddie, pension funds, insurers, and 401(k)s. That $20 billion actually makes bank second liens sounder, so this deal is a stealth bailout that strengthens bank balance sheets at the expense of the broader public. Good for banks, the illusion of being good for homeowners.

  • Brett

    What a SLAP IN THE FACE of responsible, mature homeowners. Don’t think that the banks won’t make YOU people pay for this BAILOUT, in some shape of form.

    My home has lost about 40% of its value, and it’s not going up again anytime soon, even with a big makeover. Saving only a million or so nation wide is a drop in the bucket, won’t help my property value one IOTA. Nobody is going to jail, if I want to refinance, I would still get hammered by all of the stupid closing costs (I’m at 4%, could get 3% or lower). I’ve lost $100K in equity, taxes are still SKY HIGH, and the near future doesn’t look very good.

    • No, banks are being rewarded...

      Exactly. And, don’t even bother reaching for that 3% since it will cost you and take months. See, you’re responsible and are paid up to date. Banks are going to use this Obama bank-welfare scheme to shore up their balance sheets for the delinquent charges. You, well, just need to keep writing it off as usual and bend over.

  • Brett

    The banks got bailed out 4 or 5 years ago, and now, they are getting bailed out AGAIN. When will this madness stop???

  • Journeyone

    Reminder: The banks and realtors who were giving mortgages to vulnerable adults are also included in these bad foreclosures. Yes, we also have the very large percentage of people who got in over their head, refinanced their homes not to get a lower payment or shorter years but to get money to spend on new cars, large screen TV’s, vacations etc.
    People do not know how to budget their money and there is NO SCHOOL in this country that will teach them and you know their parents don’t know how. So this is a generation thing.

    • nope

      You may want to look up the definition of vulnerable adults. Any one can put themselves in vulnerable situations. I’ve sky dived and paid the ticket to do it. But lets call it what it is. It’s not “vulnerable” adults, it’s irresponsible adults playing into the hands of banking and government greed, thus acting greedy, these irresponsible adults put themselves in a vulnerable situtaion that the rest of us must bail them out of. You don’t buy what you cannot reasonably afford or know that you will continue to be able to afford.

  • William

    This will only prolong the inevitable create another bubble.

    It will make things worse in the long run.

    These are the same idiots who created the problem by forcing lenders to make bad loans and then guaranteeing them.

    • JGE

      Forcing lenders????? They WANTED to make the loans so they could BET that they would fail!!!!

      • You got it

        You’re skipping a step. The lenders did write up many loans to remain competitive in that crazy time and they certainly cashed in. But, they made those loans— to sell. They sold them on the market to purge their responsibility so that Wall Street could turn around and sell the mortgage backed securities on the derivatives market. So, Wall Street asked for them—demanded them—so banks made them, alot of them—so that Wall Street could not only bet on them but buy insurance on their bets knowing they were bad.

  • Get Educated

    Anyone actually looked at the program you’re commenting on?

    If you have a mortgage over 5.25% and is now under water and is from one of the 5 banks and you are current on your payments – you will be able to refinance at current rates and part of the settlement will help cover costs of the refi.

    However – if you are like a friend, had a bad financial spell and got behind on a payment (30 days or more) – he now has the ability to pay up to current and can’t get the bank to take his money. Has had payments returned / refused. They have served him with foreclosure papers.

    Wont take his payment, would rather take his house.

    This settlement is better than nothing, but still leave loopholes big enough to drive a truck through.

  • http://www.newstrendr.com/news/mortgage-settlement Mortgage Settlement | NewsTrendr

    […] CBS Local […]

  • See BS

    The cost will be passed off on new homebuyers and people living in apartments.

    Just so people who should have bought Marvin Gardens can keep their Pacific Avenue homes.

  • Jge

    The banks aren’t getting bailed out. They are being forced to use the huge profits they’ve made SINCE the bailout to “bailout” the consumers they made theiir money off of by using the housing market like a Vegas casino.

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