(DES MOINES, Iowa) The nation’s five largest mortgage servicers report providing nearly $40 million in direct relief through the National Mortgage Settlement announced early last year.
According to a progress report released today by independent settlement monitor Joseph A. Smith, Jr. of the Office of Mortgage Settlement Oversight (a breakdown of Iowa relief is attached), the servicers report providing the following direct relief to Iowa borrowers from March 1, 2012 to June 30, 2013:
- The five servicers provided $39,580,069 in relief to 1,192 Iowa homeowners;
- An additional 169 borrowers are currently in trial modifications worth at least $5.7 million;
- The average relief in Iowa was slightly more than $33,205 per borrower;
- 600 Iowa borrowers received more than $17 million in principal reductions;
- 243 Iowa borrowers have obtained and completed mortgage refinances through the settlement. The average rate reduction was nearly 3.5%.
Nationally, the report found that more than a 640,000 borrowers benefited from some type of settlement-related relief, which topped $51 billion. On average, the relief averaged just under $80,000 per borrower.
“The National Mortgage Settlement continues help homeowners in Iowa and across the country beyond what we had ever expected,” Attorney General Tom Miller said. “The servicers’ self-reported data shows that they met their homeowner relief targets for this three-year agreement in roughly one year. That’s significant, because homeowners needed help sooner rather than later.” Miller noted that consumer relief has exceeded expectations in all three major categories: first-lien principal reduction, second-lien principal reduction, and short sales.
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.
In addition to the direct relief to homeowners, last year 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 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.
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 have been providing 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.