Relief nearly doubles first estimate announced one year ago
(DES MOINES, Iowa) The nation’s five largest mortgage servicers reported providing nearly $32 million in direct relief to Iowa homeowners last year, following the national mortgage settlement announced one year ago.
- The five servicers provided $31,854,899 in relief to 956 Iowa homeowners;
- An additional 102 homeowners are currently in trial modifications worth at least $1.7 million;
- The average relief in Iowa was $33,321 per borrower;
- 454 Iowa homeowners received a total of $12.7 million in principal reductions, for an average of
$28,000 per borrower;
- 204 Iowa homeowners successfully obtained mortgage refinances through the settlement (average rate reduction: 3.66%; average savings: $38,932), which saved them $7.9 million in finance charges.
Nationally, the report found that more than a half-million borrowers benefited from some type of settlement-related relief, which approached $46 billion. On average, the relief averaged more than $82,000 per borrower.
“At the time we announced the settlement we estimated that the five servicers would provide roughly $17.4 million in direct relief to Iowans. I’m very pleased to say that we’ve now nearly doubled that, and the amounts are still growing,” said Attorney General Tom Miller. “That’s terrific news for Iowa’s homeowners, our neighborhoods, and our state’s economy.” In addition to the direct relief to homeowners, the state received a direct payment of $17,051,922 that is largely being used for mortgage assistance programs, such as Iowa Mortgage Help.
Miller was the lead state attorney general in the joint state-federal investigation and what was initially announced as a $25 billion landmark settlement into mortgage servicing practices by the nation’s five biggest mortgage servicers. The servicers include JPMorgan Chase, Bank of America, Citigroup, Wells Fargo and Ally Financial (formerly GMAC). The investigation began in October of 2010 over reports of widespread “robo-signing” of foreclosure documents, and broadened into other troubling mortgage servicing practices.
“We called this a $25 billion dollar national settlement because we didn’t want to promise a dollar more in consumer relief than we could deliver through the settlement,” said Miller. “I’m elated to see that our estimates were quite low. We’re now at nearly $46 billion nationally, and the number is still rising.”
The direct relief is provided largely through an array of loan modifications, including principal reductions and refinancing. Other forms of relief include short sales and transitional assistance, forbearance of principal for unemployed borrowers, benefits for service members who are forced to sell their home at a loss as a result of a permanent change in station order, and other programs.
Miller noted that the figures provided in the monitor’s report are self-reported by the servicers. The amounts do not reflect credits the servicers will receive against their obligations under terms of the settlement, which are issued by the monitor. Because the servicers do not receive dollar-for-dollar credit for most forms of homeowner relief, they will actually provide significantly more relief than what the settlement requires.
In addition to providing the direct borrower relief, the settlement also required servicers to adopt more than 300 new servicing standards. The new standards are designed to address the issues that led to the settlement, including the fraudulent robo-signing of foreclosure documents. The servicing standards have already improved how servicers treat borrowers, according to Miller.
Iowans Seeking Help or Answers Should Contact Iowa Mortgage Help or Mortgage Servicer
Miller urges Iowans who are currently behind on their monthly mortgage payment, or may soon experience financial trouble, to contact the Iowa Mortgage Help Hotline, toll-free, at 1-877-622-4866 or www.IowaMortgageHelp.com. The hotline is free, confidential, and its counselors can help Iowa homeowners identify their most appropriate course of action.
Because of the complexity of the mortgage market and terms of this three-year agreement, borrowers in some cases may be contacted directly by one of the five included mortgage servicers regarding loan modification offers, or may need to contact their mortgage servicer to obtain more information about specific programs and whether their loan qualifies.
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