Most TN homebuyers won't get a share of mortgage settlement

While Tennessee consumers stand to get about $146 million from a $25 billion settlement announced Thursday between the government and the nation’s top five mortgage-loan servicers, the benefits at street level may be limited.

Restrictions on the payouts will leave out almost all but the biggest loans on the fanciest houses, critics say.
Loans that are owned by the two government-controlled mortgage giants — known as Fannie Mae and Freddie Mac — are not covered by the the biggest portions of the agreement, the Tennessee Attorney General’s Office confirmed.


“That excludes the majority of mortgages in Tennessee,” said Jeff Hill, senior counsel in the Consumer Protection Division of the attorney general’s office.


Two main provisions of the national deal — allowing some homeowners to get loan modifications to lower their mortgages if they owe more than the property is worth or to refinance at lower rates — apply only to mortgages not backed by Fannie Mae or Freddie Mac. Mortgage professionals say most loans that remain covered are so-called jumbo loans or mortgages of at least $417,000 typically used in Middle Tennessee for homes in high-end neighborhoods.(link)