Short Sales Provided to 37% of Borrowers Under 'Robo-signing' Foreclosure Settlement

Short sales were provided to more than a third of the 309,385 borrowers who have received some kind of relief under the national foreclosure-abuse settlement with the top lenders, according to the deal’s administrator.
That means that more than a third, or 37 percent of borrowers (113,534), did not stay in their homes as a result of the much-heralded deal meant to settle charges of the “robo-signing” of foreclosure documents by processors working for the top U.S. mortgage lenders.
The allegations surfaced in the fall of 2010 after advocates and lawyers for homeowners accused lenders of submitting foreclosure documents without verification, or with false representation, or signing certain legal documents outside the presence of a notary public.
The administrator’s report covers relief provided from March 1 through September 30 of this year. The deal was reached between the lenders and U.S. and state authorities in February.
The relief so far under the settlement totals $26.11 billion, which, on average, represents about $84,385 per borrower. This figure includes active first-lien trial modifications.
Here’s the breakdown from the Office of Mortgage Settlement Oversight:
• 113,534 borrowers had either a short sale completed during this period, or the lender accepted a deed in lieu of foreclosure, waiving any unpaid principal balance in either case. The total amount of this type of relief was approximately $13.13 billion, or about $115,672 per borrower.
• 30,967 borrowers are in active first lien trial modifications as of September 30, 2012, the total principal value of which is $4.19 billion. This represents potential relief of $135,223 per borrower if the trials are completed.
• Second lien modifications and extinguishments were provided to 50,025 borrowers, representing approximately $2.78 billion in total relief. The average amount of relief for borrowers whose second liens were modified or extinguished was approximately $55,534.
• Servicers refinanced 37,396 home loans with an average unpaid principal balance of $210,398, reducing the annual interest rate by approximately 2.34 percent on average. The estimated benefit to borrowers from refinancing over the average life of the loan is approximately $1.44 billion. On average, each borrower will save approximately $409 in interest payments each month.
• Through the various other Consumer Relief programs outlined in the Settlement documents, the Servicers provided $1.01 billion in relief to 39,637 borrowers. The average amount of relief of these other programs amounts to $25,383 per borrower.

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