Is your check in the mail?
Checks to homeowners covered by a settlement between the US government and 13 mortgage lenders and servicers were slated to start going out April 12. The homeowners involved were subjected to a variety of rules violations by those mortgage companies, but in general you may be eligible to participate in the settlement if your mortgage was in any stage of foreclosure in 2009 and 2010.
On the surface, the numbers involved sound impressive: over 4.2 million homeowners will receive checks totalling $3.6 billion dollars. However, when you break down the math of those numbers, the figures are less exciting. The settlement comes to an average of less than $900 per homeowner.
This goes to show that legal settlements after the fact often don't adequately right a wrong that's been done. The best strategy is to carefully protect yourself at each stage of dealing with your mortgage loan. Here are three key rules:
- Read mortgage documents before signing. Don't feel pressured to sign anything after just glancing at it. Take the document home first and read it carefully. Make a note of any questions you have. Before signing, you should fully understand what payments you will be required to make and when they are due. You should also know whether anything could change the terms of the mortgage, and under what conditions you would be considered in default of your obligations.
- Document everything. Make sure you have evidence of every payment you have made to the mortgage company, and keep copies of every piece of correspondence to and from that company. Do not rely on any representations made by mortgage lenders unless they are in writing.
- Do not ignore notices from your mortgage company. Even if you think your mortgage company has sent you a notice about a late payment or other problem in error, do not just throw it away. Follow it up to make sure the mistake is corrected.
It's bad enough when someone faces foreclosure for financial reasons, but it is completely unjustified when it is due to a procedural error or violation by a mortgage company. The more careful you are at the beginning of the mortgage process and throughout it as well, the better able you will be to defend yourself if foreclosure procedures are initiated against you without proper justification.