After months of discussion 49 states reached an agreement with the five largest loan servicers and will be offering as much as $25 billion to distressed borrowers and to states and the Federal Government.

This is exciting news for many homeowners that are upside down in their mortgages.  The servicers that are participating in this settlement are developing the guidelines to implement the plan to help homeowners.  The settlement is very complex so the plan is to execute it over the next three years (timeline taken off


  • Over the next 30 to 60 days, settlement negotiators will be selecting an administrator to handle the logistics of the settlement and monitor compliance.
  • Over the next six to nine months, the settlement administrator, attorneys general and the mortgage servicers will work to identify homeowners eligible for the immediate cash payments, principal reductions and refinancing. Those eligible will receive letters.
  • This settlement will be executed over the next three years.

More information about all of the details of the settlement can be found at:

What does that mean to Idahoans?  If you are upside down on your mortgage or struggling with your payment, there will be money set aside to help some homeowners re-finance, reduce loan principle and help with loan modifications.  It’s important to know that this relief may not be available immediately (see timeline).  It’s hard to say how many Idaho homeowners will get relief from this settlement.  The Idaho Statesman contacted the Attorney Generals Office and recently published this Q and A on how this would benefit Idahoans:

Most of the money will go to homeowners that are struggling to make payments and are at risk of foreclosure but have no equity so have been unable to refinance their loan.  See article above from the statesman, “For about 1 million underwater homeowners, their loan principal will be reduced by an average of $20,000.  But more than 90 percent of underwater homeowners won’t be helped.  Some, however, might be eligible to refinance at a rate of 5.25%”

You can contact your bank directly to obtain more information about implementation and requirements.

I personally have contacted two of the servicers for a client and have been told by one that they will not know how they are implementing this settlement for a minimum of 90 days.  The other servicer told me that they would be implementing the settlement in 6 to 9 months.

We definitely will be keeping our ears open and relaying any information that we possibly can.

In the meantime, read up on everything you can about this settlement to see if you would be a candidate and IF you have time to wait for the implementation of the settlement.


I am still hearing a lot of sad stories about people wanting to stay in their homes, but unable to get the help that they want from their service provider.  It appears that there are more success stories lately about loan modifications, but there is still an incredible number of frustrated homeowners that are not getting good information from their loan service company and they either give up or they follow the information from a customer service representative that may not fully understand the program.  What I have found is persistence is key. 

  1. Continue to call your service company until you get clear and concise instructions on what you can do to be considered for one of their programs.  You can start by visiting  If you don’t qualify for one of the government programs, many servicers have their OWN programs).
  2. If you get someone on the phone that does not sound like they know what they are talking about.  Politely hang up and call back.
  3. Once you get an answer or instructions, call AT LEAST one more time to make sure you were given the right instructions
  4. Fill out paperwork requested thoroughly and on time.
  5. Gather and submit all documents requested.
  6. If you receive a letter that is declining you from a modification or other program, call and ask more questions.  Ask for the supervisor.  Make sure you understand why they are saying that you do not qualify.  What would it take to qualify?  Can you change a couple of things in your finances to make this happen?  GET DETAILS! 
  7. Don’t give up.  It’s hard to consistently call these servicers but if you want to stay in your home, don’t bury your head in the sand.

You can research several of the options for foreclosure alternatives on  If you decide a loan modification isn’t the direction you want to go, there are other options instead of foreclosure.