LAS VEGAS -- Thousands of Nevada homeowners who lost their homes to foreclosure may be owed money by their bank.
Nevada's attorney general is sending out nearly 67,000 letters to foreclosed homeowners informing them of a massive settlement. The settlement earmarks $1.5 billion in payments to about $1.8 million borrowers nationwide.
Foreclosed homeowners may be eligible for a payment of at least $840, or more, in some cases.
Attorney General Catherine Cortez-Masto said the settlement will be paid to homeowners whose banks didn't handle the foreclosures properly.
"The lack of a single point of contact, the dual track where you had somebody working trying to get a modification and all of a sudden you get foreclosed on and they couldn't figure out what was going on. We had individuals contacting us saying, 'listen, I submitted my paperwork, the same paperwork five, six, seven, eight, nine times. It just got ridiculous," Cortez Masto said.
Beginning Oct. 5, banks must do three major things. First, provide one person to handle a home loan. Second, keep from losing the paperwork. Third, a homeowner can't be foreclosed on if they are in the middle of modifying their loan. If a bank breaks the rules, it can be fined as much as $5 million.
Early numbers show Bank of America lagging behind Chase and Wells Fargo when it comes to refinancing and principal reductions.
"I am bringing Bank of America in. We're going to talk with them to find out what's happening here in the state because we have our separate settlement," Masto said.
Homeowners must submit an application for the settlement. Checks will be mailed next year. The final amount of the individual checks will depend on how many people apply for the settlement. The settlement impacts borrowers who lost their homes between Jan. 1, 2008 and Dec. 31, 2011.
"I encourage eligible Nevadans to fill out their claim forms as soon as possible and remember that the process to apply is free," said Masto. "
The attorney general's office is concerned about fraud. Scammers have taken official letters, put their own information on then and stolen thousands from vulnerable homeowners. Claims can be filed online by clicking here.