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SALT LAKE CITY — Up to 2 million foreclosed homeowners throughout the US will soon get a letter that could mean hundreds of dollars from the five biggest mortgage lenders in the country.
In Utah, nearly 16,000 Utahns will receive a claim form and potentially, money from that settlement, averaging $1,500.
Wade Farraway, an assistant Attorney General, spends his day fighting against mortgage fraud in Utah. He also heads up the Utah Attorney General's settlement in the National Mortgage Settlement with Wells Fargo, GMAC, JP Morgan Chase, Citi and Bank of America.
"Those that have been foreclosed on by any of these five banks, between 2008 and 2011 are probably looking at getting from $800 to $2,000," Farraway said.
The agreement was finalized in the spring, promising up to $1.5 billion to help distressed borrowers who lost their homes. The money will go to people of whom the mortgage companies are accused of taking advantage.
"Where the banks were telling you not to pay your mortgage, and at the same time tell you, ‘we will give you a modification,' but before the modification could occur, they were foreclosing on these individuals," Farraway said.
Not all loans, however, are part of the settlement. Fannie Mae, Freddie Mac or FHA will not be included, but those serviced by the Wells Fargo, GMAC, JP Morgan Chase, Citi and Bank of America will.
Settlement cards must be filled and sent by Jan. 18.
The attorney general's office is already warning about possible scam artists who will charge a fee to fill the claim out, with promises of more settlement money.
The settlement does not stop homeowners from taking their lenders to court if they believe they were unfairly dealt with.