National Mortgage Settlement: Monitor Says Banks Complete Consumer Relief Requirements

National Mortgage Settlement: Monitor Says Banks Complete Consumer Relief RequirementsThe overseer of the National Mortgage Settlement says the remaining four top lenders under the agreement — Bank of America, Chase, Citi and Wells Fargo — have satisfied their consumer relief and refinancing obligations.
In total, the banks provided more than $50 billion of gross relief, said Joseph A. Smith, Jr., Monitor of the National Mortgage Settlement. More than 600,000 families received some form of relief.
Ally Financial had previously satisfied its obligations.
The settlement arose from allegations that lenders used forged and shoddy paperwork to carelessly foreclose on struggling homeowners, a practice known as “robo-signing.” Smith will continue to monitor how banks service mortgages and issue additional reports on their progress.
“My team spent 36,000 hours reviewing and testing the consumer relief and refinancing activities reported by the banks,” Smith said. “Because of this extensive process, I’m confident in concluding that the banks have satisfied their obligations.”
Here’s the breakdown:

  • 37 percent of credited total relief was in the form of first lien principal forgiveness;
  • 17 percent involved refinancing assistance;
  • 15 percent covered second lien principal forgiveness;
  • 31 percent was other relief, including assistance for short sales and deeds in lieu of foreclosure.

The mortgage servicers were required to come up with $20 billion in relief to borrowers with different types of aid assigned different amounts of credit toward that figure.
While the servicers came up with a total of $50 billion to assist more than 600,000 families, only $20.7 billion of that amount counted under the settlement.
The remaining $5 billion of the mortgage settlement has already been paid out to states for housing counseling and to people who lost their homes.
This all means the monetary requirement of the agreement has been completed.

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