A client recently notified me that the Illinois Attorney General is sending out notices to Illinois homeowners regarding the National Mortgage Settlement. Included with the notice is a claim form. The claim form is rather simple -- it includes the borrower's name, loan number, property address, and a claimant ID. It also includes a current home address if different than the property address.
There are three check boxes. Borrowers must check at least one to receive a payment. The options are as follows:
1. I was unable to make payments on my loan due to a financial hardship.
2. I attempted to get a mortgage loan modification or other foreclosure alternative, but the mortgage servicer company mishandled my application or pursued foreclosure on my loan while the application was pending or after it was approved.
3. The mortgage servicer company, foreclosure trustee, or their attorneys made errors in the foreclosure process or leading up to the foreclosure process.
The accompanying documents don't really explain what happens next. I would imagine that there will be some attempt to verify that there is a factual basis behind the checked box's assertion, but there is no apparent way to include a factual statement or supporting documentation.
Interestingly enough, the State of Illinois is estimating that eligible borrowers will receive $840 as a minimum payment. According to the included FAQ, this figure relies on every eligible borrower submitting a claim form. Obviously, there is a realist in Lisa Madigan's office because the letter also states that since the payment is based on 100% participation, "the payment you receive will very likely be higher."
The most important piece of information to take away from this post is that participating in the settlement does not prevent you from asserting claims against your lender. If you accept the payment, you can still sue your lender -- assuming that the statute of limitations on your claim hasn't lapsed.
The bottom line is this: if you get the form, send it in -- something is better than nothing in this situation.