400,000 California homeowners eligible for settlement

September 25, 2012 12:00:00 AM PDT
Millions of Californians were foreclosed on after the housing market collapsed, some who shouldn't have been. Now over 400,000 are eligible for a piece of a $25 billion settlement.

Earlier this year, we brought you the story of Kenneth Hamilton, who lost his home of 14 years to foreclosure. Now he and more than 430,000 Californians who've been foreclosed on may be getting a check in the mail around the middle of next year.

"I'm excited because I sure need it," said Hamilton.

California Attorney General Kamala Harris announced that the refund process just began for certain foreclosure victims as part of the National Mortgage Settlement. $1.5 billion of the $25 billion settlement aims to compensate borrowers who were wrongfully foreclosed upon.

"This is for people whose foreclosure were either done improperly, who might have been dual-tracked, which means they applied for a loan modification at the same time they were foreclosed upon or if they suffered financial hardship that the bank didn't take into account," said Lynda Gledhill from the California Attorney General's Office.

It only applies to customers who were foreclosed on between 2008 and 2011 and had a mortgage with the five banks involved in the settlement, including Wells Fargo and Bank of America. The claim forms will be landing in mailboxes over the next several weeks.

"We really should be compensated. I believe the banks knew what they were doing when they did it," said Hamilton.

The Attorney General Office's worries that people might think their notices are a scam, but there's one way to tell they're not.

"What's key about this claim form is that it will not ask you for any of your financial information because the banks already have that," said Gledhill.

It's unclear how much people are going to get, but the smallest check will be for $840. It could be more, depending on how many of the two million people eligible nationwide actually file a claim.


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