New Jersey homeowners will receive an estimated $762 million in direct relief as part of the $25 billion settlement between five mortgage lenders and 49 states, state officials said Thursday.
State Attorney General Jeffrey Chiesa said the settlement provides for loan modifications and other forms of assistance, while also putting new standards in place for mortgage loan servicing.
New Jersey borrowers who lost their homes to foreclosure between Jan. 1, 2008 and Dec. 31, 2011, and suffered servicing abuse, will qualify for $12.5 million in cash payments. State officials said the payments will range from about $1,800 to $2,000, depending on the number of people who respond to the offer.
The value of refinanced loans to New Jersey borrowers who owe more on their mortgages than their homes are worth will be an estimated $89.5 million, Chiesa said.
Chiesa said the state will also receive a direct payment of $75.5 million to help pay for various state housing programs.
The banks involved in the settlement are Bank of America, Wells Fargo, JPMorgan Chase, Citigroup and Ally Financial.
"This is a very good thing for New Jersey," said Gov. Chris Christie. "Mostly it's good because an overwhelming amount of the money is going to go to help a group of homeowners who were disadvantaged by some of these actions that were taken by banks during the foreclosure crisis."
The banks will have three years to fulfill the terms of the deal.
Mortgage servicers will in some cases contact borrowers directly regarding loan modification options, the attorney general said.
But state officials also encouraged borrowers to reach out to lenders to obtain more information about the different forms of assistance and whether they qualify under terms of the settlement.