Where is the money?

Last week we received a call from a gentleman needing help to get his portion of the $25 billion settlement for mortgage fraud. Some know it as the "robo signing" offenses. In his opinion he had been illegally foreclosed upon and wanted to know how to apply for the compensation of $1,500-$2,000 he had heard about.

We had not needed to know this information prior, but decided to do some research. We discovered that portions of the settlement had been allotted to the 49 states that agreed to the deal. At the time the settlement was reached, Oklahoma was the only holdout. According to the Idaho Attorney General's website;

"Idaho's estimated share of the settlement is $113,789,551. From that total:

Eligible Idaho borrowers will receive an estimated $74,686,493 in benefits from loan modifications and other direct relief.

Approximately 5,000 Idaho borrowers who lost their home to foreclosure between Jan. 1, 2008, and Dec. 31, 2011, because of substandard servicing practices, will receive $9,998,041 in cash payments averaging $1,500 to $2,000 for each affected borrower. These borrowers have been identified by their servicers and will be contacted by the settlement administrator.

The settling servicers will pay $15,172,779 to fund a program that allows underwater borrowers to refinance their loans.

The state will receive $13,932,238.

According to Idaho State Attorney General, Lawrence Wasden. "The agreement does not prevent homeowners or investors from pursuing individual, institutional or class action civil cases against the five banks, nor does it prevent state attorneys general and federal agencies from pursuing other aspects of the mortgage crisis, including securities cases," Wasden said. "Further, the settlement does not grant the banks immunity from criminal prosecution."

The individual who contacted us said he had already contacted the loan servicer who told him that it was "too late" since his foreclosure took place over a several month period in 2008-2009, yet the settlement language states that the settlement is to benefit victims of mortgage fraud back to 2008. We advised him to contact the AG's office and would advise you to do the same if you have been victimized as well. The settlement does not cover Freddie Mac and Fannie Mae loans however, as those have been addressed in the Home Affordable Modification Program, (HAMP) sponsored by the federal government.

Many states have decided to use their portions of the settlement for other needs. According to an article published recently in the New York Times, "The $2.5 billion was intended to be under the control of the state attorneys general, who negotiated the settlement with the five banks - Bank of America, Wells Fargo, JPMorgan Chase, Citigroup and Ally. But there is enough wiggle room in the agreement, as well as in separate terms agreed to by each state, to give legislatures and governors wide latitude. The money can, for example, be counted as a 'civil penalty' won by the state, and some leaders have argued that states are entitled to the money because the housing crash decimated tax collections."

Some attorneys general have complied quietly with requests to repurpose the money, while others have protested. Lisa Madigan, the Democratic attorney general of Illinois, said she would oppose any effort to divert the funds. Tom Horne, the Republican attorney general of Arizona, said he disagreed with the state's move to take about half its $97 million, which officials initially said was needed for prisons.

But, from the information gleaned from the Idaho Attorney General's site it appears that most of the money received by Idaho, or about $100 million will be used as intended. Good luck and plenty of patience may be needed to get the money if the HARP and HAMP stories we have been told are any indication.

Trust an expert... call a Realtor. Call your Realtor or visit www.cdarealtors.com to search properties on the Multiple Listing Service or to find a Realtors member who will represent your best interests.

Kim Cooper is a real estate broker and the spokesman for the Coeur d'Alene Association of Realtors. Kim and the association invite your feedback and input for this column. You may contact them by writing to the Coeur d'Alene Association of Realtors, 409 W. Neider, Coeur d'Alene, ID 83815 or by calling (208) 667-0664.