The settlement that was unveiled on 2-9-2012 has the expectation of helping borrowers who are facing difficulties making their mortgage payments, those underwater and those who have lost their homes to foreclosure.  It is going to take some time to see what the settlement really means for homeowners, especially since the banks have 3 years to meet their obligations. 

What banks are participating?  Bank of America, Citigroup, JP Morgan Chase, Ally/GMAC and Wells Fargo.  But not all loans serviced by these banks will qualify.  In addition if your mortgage is owned by Fannie Mae or Freddie Mac they will not be a part of this settlement. 

The key here is to be patient.  It is going to take some time for an administrator to be put in place and for the administrator to work with servicers and attorney generals to iron out the details.  In many cases borrowers will be contacted by their servicer if they qualify for any assistance.  

Principal reductions (reducing of loan balances) will be part of the settlement but will be limited to loans owned by the banks themselves.  Many loans these banks “service” are owned by other investors and the banks are just the money collectors.  Again Fannie Mae and Freddie Mac owned loans will not qualify.

If your home mortgage is serviced by one of these big banks, and not owned by Fannie Mae or Freddie Mac (visit  or you can visit the bank’s website for more information.  Again it could be some time before homeowners actually see any benefits from this settlement.