LAS VEGAS (AP) — The Obama administration's top housing official and Nevada's attorney general said Monday they hope more struggling borrowers in a region hard hit by foreclosures will apply for a program that could save them more than $3,000 a year.
Housing and Urban Development Secretary Shaun Donovan joined Attorney General Catherine Cortez Masto to say that almost 67,000 Nevada borrowers who lost homes to foreclosure from January 2008 to December 2011 should expect forms in the mail telling how they're eligible for compensation.
More than 5,200 borrowers have received some type of consumer relief totaling more than $511 million in Nevada in recent months, the officials said. The average loan modification per borrower was just under $100,000.
But critics say participation is low in a region with 100,000 foreclosures since 2007 and where economists said they believed more than 400,000 "underwater" homeowners owed more than their houses were worth.
Borrowers face a Jan. 18 deadline to apply for some of the $57 million that Masto said is available in Nevada under the $25 billion national mortgage servicing settlement announced earlier this year.
"Given that 60 percent of Nevada homeowners are underwater still," Donovan said, "it's critical that families know that help is available ... that there's a safe, free place they can go to get assistance."
Masto emphasized that borrowers don't need to pay anyone to file their claim.
"At the end of the day, the homeowner wants to know, 'Can they save their home?' 'Can they keep a roof over their head?' 'Is there monetary relief available to help them?' and 'Will they get answers in a timely fashion from these banks?'" Masto said. "That's what they're entitled to."
Donovan spoke Monday to the Asian Real Estate Association of America convention at the Bellagio resort. The visit echoed many of President Barack Obama's campaign themes about the need to maintain a steady course making slow progress toward economic recovery. But the housing secretary said the visit had less to do with the upcoming election than with efforts to spread the word about relief available under the Mortgage Servicing Settlement reached in February with five of the nation's largest banks.
"We clearly are making progress here. We've still got a long way to go," Donovan said. "Nevada was the hardest-hit state in the country. There are still too many families underwater, still too many foreclosures. But we're seeing home prices increase, housing construction is up, and the number of underwater families is down by tens of thousands this year.
Nevada led the nation in bankruptcies, foreclosures and unemployment for many months. Foreclosures slowed after a state law went into effect last October requiring lenders to provide more documentation before seizing a house. The state now ranks fifth in the nation in foreclosures.
Unemployment has remained high, and Republican presidential candidate Mitt Romney was in Las Vegas on Friday when state officials announced the state jobless rate crept up for the second month in a row to 12.1 percent in August.
A Romney aide issued a statement Monday accusing Obama of refusing to address the housing crisis during his time in office and of saying he doesn't expect to roll out an aggressive housing plan.
"We can expect more of the same if he is given another term in office," Romney campaign spokesman Mason Harrison said.
Masto, a Democrat, recently obtained approval from state officials to use $11.7 million to set up a resource network for Nevada homeowners to jump on the first-come, first-served relief offered in the February settlement.
The settlement earmarked some $1.5 billion in payments for approximately 1.8 million borrowers nationwide who lost their homes to foreclosure and had their loan serviced by Ally Financial Inc., Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co. or Wells Fargo & Co. Exact payments depend on the total number of borrowers who take part.
Donovan said the five big lenders also face an Oct. 5 deadline to comply with a set of servicing standards including providing lenders with a consistent contact and timely responses.
Masto said borrowers should receive a claim form and instructions in the mail by Oct. 12.
She said people who believe they may qualify but have moved or haven't gotten a notice should contact the settlement administrator toll-free by calling 866-430-8358 Monday through Friday, or by sending an email to administrator(at)nationalmortgagesettlement.com.
