Mortgage Settlement Aids 550K Homeowners, Totaling $45 Billion

by devteam February 22nd, 2013 | Share

The five mortgage servicers involved inrnlast year’s $25 billion settlement over servicer errors and abuses have nowrndistributed an average of $82,000 in relief to each of 550,000 homeowners.  Joseph A. Smith who heads the Office ofrnMortgage Settlement Oversight said this is a total of $45.83 billion that hasrnbeen distributed in less than one year following the settlement agreementrnbetween the servicers and 49 state attorneys general, the Departments ofrnJustice and Housing and Urban Development (HUD).</p


Smith’s office released an interimrnreport on the progress of the settlement distribution today.  Smith said he is required to file his first progressrnreport with the courts in the second quarter of this year but he is providingrnthis, a second interim report, as part of an ongoing effort to inform thernpublic about the steps the banks have taken to implement the settlement.</p

More than $22.48 billion of thernoverall completed consumer relief has come in the form of debt forgiveness.rnBecause of the settlement, the principal reduction helps borrowers stay inrntheir homes, lowering monthly payments on over 266,000 loans and reducingrnhomeowners’ loan balances by more than $84,000 on average.</p

This is in addition to the fundsrnthat states allocated for settlement-related purposes, including over $250rnmillion for housing counseling and another $50 million to legal aid. </p

HUD Secretary Shawn Donovan saidrnthat at the one-year anniversary of the settlement, “We have already surpassedrnour initial expectations and the settlement is testament to the fact that largernscale principal reduction can be used as an important to in our efforts tornprevent foreclosures without incurring negative results.”  The job, however is not done he said and “wernwill continue to watch the banks like hawks to ensure they live up to theirrnobligations as they complete their consumer relief requirements and we measurerntheir progress on implementing new and improved servicing standards.”</p

Smith said that since his lastrnprogress report he has continued to receive valuable input for counselors,rnlawyers, advocates and others which have highlighted continuing areas ofrnconcern such as dual tracking and issues relating to single points ofrncontact.  As a result he has engaged thernbanks to address these complaints and will continue to use feedback to informrnhis oversight responsibilities. </p

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