National Mortgage Servicer Settlement Progress Report

We previously wrote about the 25 billion dollar National Mortgage Servicer Settlement and how it, supposedly, helps distressed NY homeowners.

The affected servicers are:

• Bank of America: 877-488-7814

• Citibank: 866-272-4749

• Chase: 866-372-6901

• GMAC/ALLY: 800-766-4622

• Wells Fargo: 1-800-288-3212

The above servicers have agreed to provide at least $25 billion in relief to distressed homeowners, the 49 participating states, and the federal government.

Well, have they?

Joseph A. Smith, Jr., the Monitor of the National Mortgage Settlement, recently released a “Progress Report” that outlines  progress made by the five banks that are parties to the settlement. The Office of Mortgage Settlement Oversight stated the following in a recent Press Release:

“The report discloses that the banks have granted $10.56 billion in consumer relief to borrowers between March 1 and June 30, 2012. Additionally, first lien principal reduction trials were offered and begun for about 28,000 homeowners, totaling approximately $3 billion of potential relief,” said Smith. “This information is self-reported and has not been confirmed by the professional firms working with me. Further, it represents gross dollar amounts and cannot be used to evaluate progress toward the banks’ $20 billion obligation.”

In addition, the report provides an update on the banks’ implementation of the settlement’s servicing standards.

“As of July 5, the servicers reported to me that 56 servicing standards have been incorporated into their business processes,” continued Smith. “Implementation of the mortgage servicing standards outlined in the settlement can be an important contribution to reform of the mortgage finance system.

Our take: We find some of the language used and statements made in the press release somewhat vague and troublesome. Moreover, we have not seen much relief, under the Mortgage Servicer Settlement, for our clients facing foreclosure. However, it is our understanding that all the the new servicing standards must be implemented by October 3, 2012. Hopefully, we will see more help for distressed homeowners soon thereafter.

See the Press release here.
See the Progress Report here.

If you have any questions about this or other legal issues, call the Law Firm of Vaughn, Weber & Prakope, PLLC today, at 516-858-2620, for a free consultation!