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Update on the National Mortgage Settlement Program

What Homeowners Need to Do to See if They Qualify

(FARMINGTON HILLS, MI - September 14, 2012) 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 Monitor for the National Mortgage Settlement, recently released his 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, 2012, 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:

  Relief Amount Borrowers Relief per Borrower
Ally $755,770,762 9,352 $80,814
Bank of America  $4,878,463,535 50,303  $96,982
Citiank $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

 

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%.

  Refinanced Borrowers Average Rate Reduction
Ally 140 3.2%
Bank of America 0 N/A
Citibank 5,181 2.3%
Chase 8,156 1.9%
Wells Fargo 8,596 2.3%

 

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
Chase1-866-372-6901

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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GreenPath Debt Solutions is a nationwide, non-profit financial organization that assists consumers with credit card debt, housing debt and bankruptcy concerns. Their customized services and attainable solutions have been helping people achieve their financial goals since 1961. Headquartered in Farmington Hills, Michigan, GreenPath operates more than 55 branch offices in Michigan, New York, New Hampshire, Colorado, Florida, Texas, Vermont, Illinois, Indiana, Wisconsin, Arizona and Wyoming. GreenPath also delivers licensed services throughout the United States over the Internet and telephone. GreenPath is a member of the National Foundation for Credit Counseling (NFCC) and is accredited by the Council on Accreditation (COA). For more information, visit www.greenpath.org.