Underwater homeowners in 49 states could see relief in the form of mortgage principal write-downs and refinancing because of a historic $26 billion settlement reached Feb. 9, 2012, between the states and five major lenders. Oklahoma is not included in the settlement.
Bank of America, JPMorgan Chase, Citigroup, Wells Fargo and Ally Financial agreed to the terms, which include penalties for improper foreclosure practices such as robo-signing and paperwork errors.
If you have a loan with one of these banks and you owe more than your home is worth, contact your lender to discuss your options. The settlement does not apply to Fannie Mae and Freddie Mac mortgages.
Nine other major servicers may join the settlement soon, which could bring the settlement total to as high as $40 billion.