Update on the National Mortgage Settlement Program – Do You Qualify?

RealtyTrac released foreclosure numbers for August, showing near steady numbers compared to July 2012, but a 13 percent decline in foreclosures compared to August 2011.

Also, the National Mortgage Settlement Program, recently released their first update concerning the national mortgage settlement program, and reminders of what homeowners need to do to see if they qualify for the program.

FINANCIAL RELIEF TO DATE

From March 1 to June 30, the Servicers reported that 137,846 borrowers received financial relief totaling $10.56 billion.  This represents about $76,615 per borrower.  Relief includes the amount of principal balances forgiven as part of permanent loan modifications, short sales, release of second liens, or other consumer relief programs.

Here are some specifics by mortgage servicer:

Amount of Relief

National
Borrowers

Average Relief per Borrower

Ally

$755,770,762

9,352

$80,814

Bank of America

$4,878,463,535

50,303

$96,982

Citibank

$873,408,300

17,991

$48,547

Chase

$3,014,723,815

38,019

$79,295

Wells Fargo

$1,038,853,713

22,181

$46,835

TOTAL

$10,561,220,126

137,846

$76,616

In GreenPath’s home state, Michigan accounted for 3.2% of the total homeowners, but just 1.8% of the total relief amount.  A total of 4,355 Michigan homeowners received relief totaling $185,453,670, an average of just $42,584.

Servicers also refinanced more than 22,000 loans nationwide, reducing interest rates by an average of 2.1%.

National
Borrowers

Average Rate Reduction

Ally

140

3.2%

Bank of America

0

NA

Citibank

5,181

2.3%

Chase

8,156

1.9%

Wells Fargo

8,596

2.3%

TOTAL

22,073

2.1%

Michigan homeowners accounted for 6.4% of the total refinances, and received average rate reductions of 2.3%.

AS A HOMEOWNER, HOW CAN YOU DETERMINE IF YOU QUALIFY FOR ASSISTANCE?

As a homeowner, you, by now, should have received a letter from your servicer. If not, you can call the mortgage servicer to see if your loan is eligible.

GMAC/Ally 1-800-766-4622

Bank of America 1-877-488-7814

Citigroup 1-866-272-4749

Wells Fargo 1-800-288-3212

JPMorgan Chase 1-866-372-6901

GreenPath housing counselors can answer any questions you may have by calling
(888) 860-4167.

For more information, log on to the Office of Mortgage Settlement Oversight at https://www.mortgageoversight.com/.

BACKGROUNDER: KEY DATES AND SPECIFICS ON THE NATIONAL MORTGAGE SETTLEMENT PROGRAM

In February 2012, the attorneys general of 49 states and the District of Columbia (every state but Oklahoma), the federal government (see listing below), and five banks and mortgage servicers (Ally/GMAC, Bank of America, Citibank, JPMorgan Chase and Wells Fargo) reached agreement on a mortgage settlement that will create new servicing standards, provide loan modification relief to distressed homeowners and provide funding for state and federal governments. The settlement was made formal and binding on April 5, when the U.S. District Court in Washington, D.C. entered the consent judgments containing the settlement terms.

The five banks will provide at least $25 billion in consumer relief. The money in the settlement will be distributed in several ways:

  • At least $17 billion in principal reduction and loan modification for homeowners who are in trouble and need help to avoid foreclosure.
  • Up to $3 billion in refinancing for “underwater” homeowners who are current on their mortgages but owe more than their homes’ current market value.
  • $1.5 billion in payments to homeowners who lost their homes to foreclosure between Jan. 1, 2008 and Dec. 31, 2011. These recipients will have to complete a simple form, and they will not have to drop any legal claims they may have.
  • Payments to the 49 signing states include efforts to support the prevention of foreclosure as well as consumer protection and education programs, and for civil penalties.

The settlement also establishes first-ever nationwide reforms to mortgage servicing standards. These standards require better communication with borrowers, a single point of contact, adequate staffing levels and training, and appropriate standards for executing documents in foreclosure cases.

On April 5, 2012, the Settlement went into effect when the United States District Court for the District of Columbia entered five separate consent judgments (the “Consent Judgments”) that settled claims of alleged improper mortgage servicing practices against five major mortgage servicing organizations. Those claims had been brought by a number of independent agencies.

GOVERNMENT AGENCIES

The governments and government agencies participating in the Settlement (the “government parties”) were:

• The U.S. Department of Housing and Urban Development

• The U.S. Department of Justice

• Attorneys general from 49 states and the District of Columbia

• Various state mortgage regulatory agencies

• Other releasing parties, including the Consumer Financial Protection Bureau and the U.S. Department of Treasury

SERVICER AGREEMENTS

In the Settlement, the government parties released claims against the Servicers in exchange for the Servicers’ agreement to:

• Make direct payments to governments of approximately $5 billion.

• Provide relief, including principal forgiveness, refinancing, and other forms of relief (“Consumer Relief”) to distressed borrowers.

• Change the servicing practices that they follow in their dealings with borrowers by the adoption of more than 300 servicing standards (the “Servicing Standards”).

• Implement various protections for military personnel.

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One Response to Update on the National Mortgage Settlement Program – Do You Qualify?

  1. Pingback: Update on the National Mortgage Settlement Program – Do You Qualify? « Sunset Dream Books

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