Community Advocates Seek Data on True Impact of Mortgage Settlement

Community Advocates Seek Data on True Impact of Mortgage SettlementThe official monitor over the National Mortgage Settlement should provide much more data on the impact of foreclosure relief to determine which neighborhoods are being left without meaningful resolution, say scores of consumer advocacy groups.
More than one hundred national and local homeowner-advocacy organizations are asking Joseph A. Smith, head of the Office of Mortgage Settlement Oversight, to provide data down to the zip code level if necessary.
“The Monitor should share this data at a census tract or zip code level, so that the public may finally understand which neighborhoods are being provided with foreclosure relief under the settlement,” states the letter, dated March 27, 2013. “Without this data, it is impossible to measure the impact of the national mortgage settlement in any meaningful way…”
Publishing data at the neighborhood level “would not violate any homeowner’s privacy, but would provide the public with critical information,” the groups say.
Earlier this month, Smith released the latest report on the progress of the five lenders — Bank of America, JPMorgan Chase, Wells Fargo, Citibank and Ally Financial (formerly GMAC — in meeting their foreclosure relief requirements.
Nationwide, 42 percent of the debt forgiven through Dec. 31 has been via “short sales completed/deficiency forgiven”, or about $19.505 billion out of the total relief of $45.82 billion.
In a short sale, the home is sold for less that the homeowner owes in mortgages. In this type of relief under the settlement, that “deficiency” is forgiven. But consumer advocates have criticized the reliance on short sales, which defeats the goal of keep more families in their homes — a true foreclosure rescue.
The groups asking for more data are concerned that relief is sufficiently reaching hardest-hit, minority communities.
“Discriminatory and predatory lending practices inflated the subprime lending bubble and caused the nation’s financial collapse and foreclosure crisis,” states the letter to Smith. “Today, banks are reportedly failing to maintain REO properties in communities of color adequately, and there is evidence that vacant homes lost to foreclosure are driving down property values and driving up crime in hardest-hit neighborhoods.”
Another point of contention is the settlement’s requirement that banks provide a “single point of contact” to guide consumers. That requirement is not being met, the groups allege.
“This reform is critical to cutting back on delays and improving outcomes for borrowers and lenders,” the letter to Smith states.
The advocates say that 81 percent of housing counselors surveyed by the National Housing Resource Center, and 70 percent of housing counselors surveyed by the California Reinvestment Coalition, reported that their contact at the bank was only “sometimes,” “rarely,” or “never” accessible, consistent, or knowledgeable about program rules.
“We in the civil rights community hoped that the National Mortgage Settlement might give our families relief from unnecessary foreclosure with the promise of principal reduction,” said Janet Murguía, president and CEO of the National Council of La Raza. “However, a year since the agreement was made, we hear from our housing counselors that our families — those who were hit hardest by the crisis — have seen little to no relief. Without race, ethnic, and geographic data, it is impossible to tell whether banks have met their full obligations under the settlement.”

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