On top of all that, homeowners who have any mortgage debt forgiven after this month will have to pay federal taxes on the amount as if it were income. That is, unless Congress extends a temporary provision to waive such payments for mortgage debts of $2 million or less.
"Congress should make an extension of this law a top priority in order to help as many homeowners facing foreclosure as possible," said the heads of the Financial Services Roundtable, the Center for Responsible Lending and the Housing Policy Council in joint letters to House and Senate leaders.
Owen Jarvis, an attorney who works on foreclosure prevention at St. Ambrose Housing Aid Center in Baltimore, said the settlement results aren't perfect but still strike him as praiseworthy.
"I think overall … it's a fantastic benefit for homeowners," he said.
For instance, principal reduction had been "very rare and now is less rare," Jarvis said. One of his clients had an entire home equity line of credit — more than $100,000 — forgiven by Bank of America.
But White, with the consumer rights coalition, was hoping to see much more of that type of assistance. She's concerned, too, that there's no way to tell where in Maryland the settlement help is going — to the hardest-hit neighborhoods or to homeowners whose big balances will help the servicers get to the mandated dollar amount the fastest. (Maryland's share of the $25 billion is about $957 million.)
The consumer rights coalition and other groups have called on the settlement's monitor to require data from the servicers that would categorize aid by ZIP code. They've also asked state officials to include this requirement in any future settlements with other servicers.
Another agreement may indeed be on the way. "We have a group that is working with the next nine biggest banks," Gansler said.
There's a deadline fast approaching for one category of aid in the current settlement: People foreclosed on between 2008 and 2011 could qualify for a payment of at least $840 — probably more — but only if they apply by Jan. 18. The amount of restitution will rise if not all those who are eligible apply.
Applicants who received a claim form can file online at nationalmortgagesettlementclaim.com. Those who think they're eligible and haven't received a form should call the settlement administrator at 866-430-8358.
Besong, the Upper Marlboro resident, lives in a part of the state where the housing bust and foreclosure crisis hit residents — and home values — particularly hard. But because she had two loan modifications after divorce reduced her household income, she said, she couldn't convince the customer-service representative assigned to her earlier this year that she was eligible for settlement aid.
After several months of trying, she wrote a letter of complaint to her servicer. A new representative was assigned. A few weeks later, she had her approval letter in hand.
Now she's trying to get the word out to other homeowners: Apply for the help before the money's gone.
"This worked for me," she said. "If it worked for me, it could work for you."
Some homeowners struggling with their loan payments or unable to refinance into today's low rates could be eligible for help from the national mortgage settlement. Also eligible are some who lost their homes to foreclosure between 2008 and 2011.
The aid applies only to loans owned or serviced by Bank of America, Wells Fargo, JPMorgan Chase, Citigroup or Ally Financial (the former GMAC), and only if those loans are not owned or guaranteed by Fannie Mae or Freddie Mac. Loans insured by the Federal Housing Administration aren't technically ineligible for settlement principal reduction, but the rules make it unlikely that many FHA loans will see such aid.
Maryland officials, concerned that homeowners might fall prey to settlement scammers charging fees, recommend seeking free help from a housing counselor to navigate the process. The state has lists and other details at mdhope.org.
More details: nationalforeclosuresettlement.com