Banks Report $51B in Mortgage Settlement Relief, Monitor Says

Banks Report $51B in Mortgage Settlement Relief, Monitor SaysFive of the biggest U.S. banks have reported $51.33 billion in mortgage modifications and other foreclosure-prevention measures through June 30th under the landmark settlement reached last year.
Joseph A. Smith, the monitor appointed by state and federal authorities to supervise relief efforts under the National Mortgage Settlement, said the summary released Thursday is the fifth and final update his office will provide.
Smith said his office still has to verify the figures provided by the lenders.
According to the data provided, 643,726 borrowers have seen some type of mortgage relief or other assistance, such as expedited short sales or limited mortgage principal forgiveness. Many are in first-lien trial modifications.
“As the banks begin to reach their total consumer relief obligations, I am encouraged to see how the Settlement has had a measurable impact on hundreds of thousands of borrowers and their communities across the nation,” Smith said.
Only one of the five banks party to the settlement, ResCap Parties (formerly GMAC which rebranded as Ally Financial), has received full credit for its consumer relief.
In May, Bank of America and Chase asserted that they had completed their obligations. Wells Fargo and Citi are the other two lenders named in the settlement, which stemmed from borrower abuses, including the now-infamous “robo-signing” of foreclosure affidavits.
“My professional firms and I also are reviewing consumer relief progress through the end of 2012 for the four banks that have not yet been credited,” Smith said.
The monitor said he will release his findings on the four banks in mid-September. He will also review 2013 activities by Bank of America and JPMorgan Chase to determine if they have met settlement obligations. The BofA and Chase findings will be made public “by the end of the year,” Smith said.
Consumer advocates and state attorneys general have relayed to Smith complaints from borrowers regarding mortgage modification delays and other alleged failures by the settlement banks to meet their servicing requirements under the deal with U.S. housing officials and 49 states.
Smith said he will issue a second compliance report in November or December to determine if the five banks are meeting stricter servicing standards.
In June, Smith announced his first compliance report. Bank of America, Citigroup and JPMorgan Chase were each cited for multiple violations of basic servicing standards, such as failing to notify loan modification applicants of missing documents and starting the foreclosure process without notifying borrowers.
Wells Fargo failed one of Smith’s 29 metrics. Ally Financial (formerly GMAC), which is 74 percent owned by the government, met all the requirements.
Complaints about “dual-tracking” — the practice of moving forward with foreclosure while a bank is negotiating a mortgage modification — have led to talks between settlement authorities and the five banks.
The talks center on preventing dual-tracking by clarifying the policies that determine which borrowers have met minimum requirements for getting a loan modification, thus avoiding the predicament of having to simultaneously fight foreclosure.

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