Skip to main content

New York State Benefits From $1.8 Billion-Plus in Consumer Relief From Servicer Settlement

Feb 21, 2013

Following the release of the second official report on the implementation of the Nationwide Mortgage Settlement, New York State Attorney General Eric T. Schneiderman noted encouraging progress on behalf of New York State homeowners. The report, which was issued recently by the settlement’s national monitor showed that $1.8 billion-plus in consumer relief has been delivered to New York homeowners since March of 2012. To date, 21,535 New York homeowners have received assistance, including $1.2 billion in principal reductions on first and second mortgages and mortgage refinances that lower interest rates on their loans. “The National Mortgage Settlement was a first step in helping homeowners who were impacted by the foreclosure crisis that devastated communities across this country. While there are still too many homeowners in New York who are at-risk of foreclosure, today’s report reflects significant progress and we expect more relief in the future,” said Attorney General Schneiderman. “Thousands of New Yorkers have received over $1.8 billion in relief from their mortgage servicers as a result of this settlement, but we must remain vigilant to ensure all eligible New Yorkers are getting the help they deserve and that the banks are being held accountable under the terms of the agreement.” As part of the 2012 settlement, the five largest mortgage servicers have agreed to a $25 billion penalty under a joint state-national settlement structure. A minimum of $17 billion goes directly to borrowers nationally through a series of homeowner relief efforts, including principal reduction. Servicers have also committed $3 billion to an underwater mortgage refinancing program for homeowners whose mortgages are worth more than the value of their homes. The National Mortgage Settlement is the largest joint state-federal settlement in history and it is the result of a massive civil law enforcement investigation and initiative by state attorneys general, state banking regulators, and nearly a dozen federal agencies. The agreement was with the nation’s five largest servicers: Bank of America Corporation, JPMorgan Chase & Co., Wells Fargo & Company, Citigroup, Inc., and Ally Financial, Inc. (formerly GMAC). Collectively, the five banks service nearly 60 percent of the nation’s mortgages. The below figures represent the total consumer relief to New York homeowners from March 1st through December 2012: ► Principal Forgiveness On First Mortgages Completed or in Process: $472,134,465 (3,841 Borrowers) ► Completed Second Lien Principal Reductions and/or Extinguishments: $760,586,937 (9,017 Borrowers) ► Refinances Completed: 818 Borrowers with an average interest rate reduction of 2.6% ► Total Consumer Relief in NY in Actual Dollars Across all Categories: Over $1.8 Billion ► Total Number Of New York Borrowers Receiving Relief Across All Categories: 21,535 Bank of America and JP Morgan Chase have been particularly active in New York, providing a combined total of 1st mortgage principal reductions for 3,151 homeowners statewide. The same cannot be said for Wells Fargo who has only provided 1st mortgage principal reductions for 315 borrowers since the program began, despite having distressed loan portfolios that are of similar size to Bank of America and Chase in the New York market. “We expect Wells Fargo to increase their consumer relief activity for struggling New Yorkers,” saidAttorney General Schneiderman. “My office will hold servicers accountable and ensure that every institution lives up to their end of this Agreement.” Despite the progress illustrated by the report, the Attorney General’s office remains vigilant to ensure that mortgage servicers live up to their responsibilities under the settlement, including compliance with the servicing reforms contained in the agreement. Consumers should file a complaint with the Office of the Attorney General if servicing violations are encountered. Attorney General Schneiderman has made it a top priority of his administration to hold accountable those whose misconduct led to the collapse of the housing market– and to provide significant relief to homeowners. In the State of New York, an average of 1 in 10 mortgages is at risk of foreclosure. The approximate number of individuals living in homes that are either in foreclosure or at risk of foreclosure (based on typical household size for each distressed mortgage) exceeds the populations of Buffalo, Rochester, and Syracuse combined. In addition to the hundreds of millions of dollars in relief from lenders reflected in today’s report, Attorney General Schneiderman secured over $130 million in hard dollars for New Yorkers as part of the settlement. Of this amount, Attorney General Schneiderman launched the Homeowner Protection Program, a $60 million commitment over three years to fund housing counseling and legal services for struggling New York homeowners. Throughout New York State, 34 legal services organizations and 59 housing counseling agencies will receive over $16.1 million this year to provide free foreclosure prevention services. An additional $3.9 million has been allocated for training, technical assistance, and other support services to assist homeowners in foreclosure. In January of 2012, Attorney General Schneiderman was appointed by President Obama to co-chair the Residential Mortgage-Backed Securities Working Group. This joint investigation brings together the Department of Justice (DOJ), HUD, the Securities and Exchange Commission (SEC), the Consumer Financial Protection Bureau, several state law enforcement officials, and other federal agencies to investigate those responsible for misconduct contributing to the financial crisis through the pooling and sale of residential mortgage-backed securities. It builds upon ongoing state and federal investigations, while also launching new ones.
About the author
Published
Feb 21, 2013
Mortgage Servicers Added To Junk-Fee Naughty List

New release from CFPB lays out areas of improvement, and concern, for mortgage servicers.

In Wake Of NAR Settlement, Dual Licensing Carries RESPA, Steering Risks

With the NAR settlement pending approval, lenders hot to hire buyers' agents ought to closely consider all the risks.

A California CRA Law Undercuts Itself

Who pays when compliance costs increase? Borrowers.

CFPB Weighs Title Insurance Changes

The agency considers a proposal that would prevent home lenders from passing on title insurance costs to home buyers.

Fannie Mae Weeds Out "Prohibited or Subjective" Appraisal Language

The overall occurrence rate for these violations has gone down, Fannie Mae reports.

Arizona Bans NTRAPS, Following Other States

ALTA on a war path to ban the "predatory practice of filing unfair real estate fee agreements in property records."