Tuesday, November 20, 2012


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Report on national mortgage settlement shows progress for NYS homeowners

NEW YORK – Following the release of the first official report on the implementation of the National Mortgage Settlement today, Attorney General Eric T. Schneiderman indicated that he was encouraged by its progress on behalf of New York State homeowners. The report, which was issued today by the settlement’s national monitor, Joseph Smith, showed that over $625 million in consumer relief has been delivered to New York homeowners since March of this year. This figure is a conservative estimate that does not include thousands of additional trial loan modifications and refinance offers pending during the same period.

To date, 7,223 New York homeowners have received assistance as a result of the settlement, with each borrower receiving an average of $86,600 in the form of principal write-downs and other relief.

“The National Mortgage Settlement was a first step in aiding homeowners who were impacted by the foreclosure crisis that devastated communities across this state. While there are still too many homeowners who are at-risk of foreclosure, today’s report is encouraging and reflects significant progress,” said Schneiderman. “Thousands of New Yorkers are receiving relief from their mortgage servicers as a result of this settlement, but we must remain vigilant to ensure all eligible New Yorkers are getting the help they deserve and that the banks are being held accountable under the terms of the agreement.”

As part of the settlement, the five largest mortgage servicers have agreed to a $25 billion penalty under a joint state-national settlement structure. A minimum of $17 billion goes directly to borrowers nationally through a series of homeowner relief efforts, including principal reduction. Servicers have also committed $3 billion to an underwater mortgage refinancing program for homeowners whose mortgages are worth more than the value of their homes.

The National Mortgage Settlement is the largest joint state-federal settlement in history and it is the result of a massive civil law enforcement investigation and initiative by state attorneys general, state banking regulators, and nearly a dozen federal agencies. The agreement was with the nation’s five largest servicers: Bank of America Corporation, JPMorgan Chase & Co., Wells Fargo & Company, Citigroup, Inc., and Ally Financial, Inc. (formerly GMAC). Collectively, the five banks service nearly 60 percent of the nation’s mortgages.

The below figures represent the total consumer relief to New York homeowners from March 1st to September 30th of this year:

  • Completed Principal Forgiveness On First Mortgages: $113,867,048 (967 Borrowers)
  • Completed Forgiveness On Pre 3/1/12 Forbearance: $41,401,562 (584 Borrowers)
  • Completed Second Lien Modifications: $14,366,725 (252 Borrowers)
  • Completed Second Lien Extinguishments: $212,561,123 (2,933 Borrowers)
  • Refinances Completed: $27,587,216 (494 Borrowers)
  • Short Sales/Deeds In Lieu: $197,915,365 (1,444 Borrowers)
  • Enhanced Borrower Transitional Funds Paid By Servicer: $6,865,612 (394 Borrowers)
  • Servicers Payments For Release Of Second Lien: $439,601 (45 Borrowers)
  • Deficiency Waivers: $10,189,305 (107 Borrowers)
  • REO Properties Donated: $320,417 (3 Borrowers)
  • Total Consumer Relief: $625,513,974
  • Total Number Of New York Borrowers Receiving Relief: 7,223
  • Average Amount Of Relief Per Borrower: $86,600

Despite the progress illustrated by the report, the New York Attorney General’s office remains vigilant to ensure that mortgage servicers live up to their responsibilities under the settlement, including compliance with the servicing reforms contained in the agreement. Consumers should file a complaint with the Office of the Attorney General if servicing violations are encountered.