Tennesseans Receive Foreclosure Settlement Checks - NewsChannel5.com | Nashville News, Weather & Sports

NC5 Investigates: Consumer Alert

Tennesseans Receive Foreclosure Settlement Checks

Posted: Updated:

by Jennifer Kraus
Consumer Investigator

NASHVILLE, Tenn. - Thousands of Tennesseans have been getting checks in the mail this week as part of the largest state and federal settlement of its kind ever. These are people who lost their homes to foreclosure.

State and federal regulators went after some of the country's biggest banks and mortgage companies after discovering they had used wrong information and shady tactics to foreclose on thousands of homes.

That has caused some confusion about how much money homeowners are getting and where they're getting it from.

Terri Brown lost her house in Murfreesboro three years ago when her bank suddenly foreclosed on it. "I left the house August the 10th of 2010," Brown recalled.

Brown said it was nearly 8 months before she discovered her mortgage company had stopped withdrawing money from her bank account each month to pay her mortgage.

She tried calling her mortgage holder, Bank of America, to straighten things out, but got nowhere.

"If you'd been able to save your home, would you have saved it?" NewsChannel 5 Investigates asked Brown.

"Yes, yes," she replied.

Tennessee assistant Attorney General Matt Pulle explained, "Many of these foreclosures were preventable."

Pulle also said the Tennessee A.G.'s office has heard thousands of similar stories from Tennesseans.

"These were folks who qualified for federal programs and state programs in some cases that could have kept them in their homes but banks lost their paperwork, promised deals, offered deals and then retracted them or didn't follow through. Cases where homeowners weren't even that far behind and were trying to catch up, but couldn't simply get in touch with their bank, " he explained.

That's why state and federal regulators went after five of the biggest mortgage companies and banks on behalf of homeowners who lost their homes between January 1, 2008 and December 31, 2011.

Negotiations dragged on for more than a year. The end result was that the banks agreed to pay out a record $25 billion.

Terri Brown got a letter from the A.G.'s office late last year saying her share of the payout would be more than $800.

"It says you may be eligible to receive a payment of $840 as part of a National Mortgage Settlement," Brown read.

However, when she got a check last month, it was only $300.

"I'm like, 'Where's the rest of my money?'" Brown shared.

Brown then called NewsChannel 5 Investigates.

Assistant A.G. Pulle said, "We get those calls too."

Pulle added that there's a lot of confusion because there have actually been two major settlements against mortgage companies and banks accused of making mistakes and committing abuses in the mortgage process.

Turned out, Brown's $300 check came from the Independent Foreclosure Review settlement between the federal government and 13 banks.

Pulle said Brown and some 18,000 other Tennesseans will be getting checks from the other one, the National Mortgage Settlement, this week. Only instead of getting $840, they will be getting $1,480.

"What happened was fewer people than we all expected sent back the forms. So that just means that there was more money for fewer people," Pulle explained.

"It's not going to bring your house back?" NewsChannel 5 Investigates asked Terri Brown.

"No, no, it's not going to bring it back," she answered.

Still, Brown's excited to get more money than she expected. And while the Attorney General's office admitted $1,480 doesn't fully compensate homeowners for what they've been through, it's hoped the money will help people like Brown make a fresh start.

Regulators said they wish they could have gotten homeowners more money, but to do so probably would have taken many more years.

Checks are going to 18,000 people in Tennessee who filled out qualifying paperwork. There are some 13,000 people who were eligible to receive money who didn't fill out their paperwork.

If you're one of those people, it's not too late. You'll want to go to the national mortgage settlement website as soon as you can. Click here for website.

If you're still having trouble with foreclosure issues, the state has a free Mortgage Assistance Hotline you can call. That number is 855-876-SAVE or 7283.

Powered by WorldNow
Powered by WorldNow
All content © Copyright 2000 - 2014 NewsChannel 5 (WTVF-TV) and WorldNow. All Rights Reserved.
For more information on this site, please read our Privacy Policy and Terms of Service.