The National Mortgage Settlement Agreement in a Nutshell

By Anna Cuevas

The National Mortgage Settlement Agreement between 49 state attorney generals and mortgage services was created to compensate homeowners for loss or harm due to wrongful foreclosures, bank errors, and unethical practices by mortgage servicers and lenders. All states except Oklahoma are represented in the Agreement. While the specifics have yet to be released, homeowners may be eligible to receive cash payments, mortgage refinancing, or loan modifications that include principal reductions.

Those who may be eligible for relief under the Agreement include:

  • Homeowners who were foreclosed on between the years 2008 and 2011
  • Homeowners who owe more on their mortgage than their home is currently worth
  • Homeowners who are currently behind on their mortgage payments, or those who are considered at risk of being behind in the future
  • All properties must have been owner occupied and contain fewer than four units

The administrators of the Agreement and the mortgage servicers will determine those who may be eligible and notify them in writing. While that does not guarantee that they will be eligible for relief, it identifies homeowners who may qualify under the terms of the Agreement. The relief called for under the Agreement falls within several categories.

Homeowners foreclosed on between January 1, 2008 and December 31, 2011:

  • May be eligible to receive $1,800 to $2,000
  • May be eligible for a reduction in any funds owed on their mortgage after the foreclosure sale.
  • Must have had mortgages that were serviced or owned by one of the following banks: Bank of America, Wells Fargo, JPMorgan Chase, Citibank, or Ally Financial, previously known as GMAC.

Homeowners who are underwater, owing more on their mortgage than their home is worth (regardless of the date of the mortgage):


  • May be eligible to refinance their mortgage. Eligibility requires that a refinance would result in an interest rate reduction of 1/4 of one percent, or a $100 decrease in the monthly mortgage payment.
  • Eligible mortgages must be both serviced and owned by either Bank of America, Wells Fargo, JPMorgan Chase, Citibank, or Ally Financial, previously known as GMAC.
  • Homeowner cannot have a foreclosure or bankruptcy within the last 2 years or been late making their mortgage payment within the last 12 months.
  • Must presently have a mortgage with an interest rate of 5.25% or higher.
  • Manufactured homes are not included in the Agreement, and neither are homes insured by the FHA or VA. Fannie Mae and Freddie Mac* loans are also not included, but those homeowners may find relief under the government’s HARP** program.


* Visit Does Fannie or Freddie Own Your Loan to determine if your mortgage is owned by them.

** Visit The Home Affordable Refinance Program (HARP) for information on Fannie and Freddie loans.


Homeowners who are behind on their mortgage payments or at risk of being behind (regardless of the date of the mortgage):


  • Must have had a mortgage serviced or owned by Bank of America, JPMorgan Chase, Citibank, Wells Fargo or Ally Financial, previously GMAC. Fannie Mae and Freddie Mac loans are not eligible.
    • May be eligible to receive a loan modification that reduces the principal owed and lowers monthly payments.
    • If unemployed, may be eligible for forbearance, which delays the foreclosure process, while offering an opportunity for the homeowner to bring their mortgage current.
    • May be able to prevent foreclosure with a short sale, which involves selling a home for less than the amount owed on the mortgage.
    • May be able to prevent foreclosure by giving the lender a deed in lieu of foreclosure, a document which transfers ownership of the property to the bank.
    • May be eligible to receive funds to assist in relocation after a foreclosure.
    • May be eligible for forgiveness of a portion of the amounts owed after foreclosure or short sale.


While the specific details of qualifying for relief have not been made available, homeowners who are identified as potentially being eligible for relief must meet the eligibility requirements above. Those homeowners should receive an official claim form from their state’s administrator. Homeowners who believe they are eligible but have relocated can provide updated contact information through their Attorney General.


By becoming informed about the different programs available and their eligibility for relief and/or compensation, homeowners may find that they can prevent foreclosures or be qualified to receive compensation for foreclosures which fall within the Agreement’s guidelines.


Anna Cuevas, ex-bank executive turned homeowner advocate known as “America’s Loan Modification Guru,” has empowered and guided thousands of Americans in keeping their homes from foreclosure through loan modification self-advocacy. A popular blogger (, Cuevas has been called a “superhero of the loan modification industry” and has been nominated for CNN’s Heroes. She is the #1 bestselling author of SAVE YOUR HOME Without Losing Your Mind or Money.



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