In the year since state Attorneys General and the federal government reached a historic consumer protection settlement with the nation’s five largest banks, the banks report they have provided nearly $46 billion in gross relief to more than 550,000 borrowers, according to an independent monitor’s report released this morning.
“While there is still much work to do, I am encouraged by the substantial amount of relief provided to homeowners nationwide and in our state,” said Attorney General Bob Ferguson. “Washington has been a leader in these negotiations and I look forward to working with my counterparts to continue to pursue additional relief for families.”
The independent Office of Mortgage Settlement Oversight’s report details the consumer relief the five banks—Ally, Chase, Bank of America, Citi and Wells Fargo—have provided from March 1, 2012 to Dec. 31, 2012 nationwide. The nearly $46 billion includes more than $42 billion in completed relief and roughly $3.5 billion in active trial modifications.
Closer to home, the banks report more than 12,000 families in Washington state have received roughly $1.1 billion in gross assistance:
· $1 billion in relief provided to date;
· $100 million in proposed modifications offered to consumers or in a trial period.
Of this amount:
· Roughly 6,400 Washington families received first and/or second mortgage loan modifications or loan forgiveness, providing immediate relief and allowing families to stay in their homes; and
· Another 4,736 received short sale assistance, which directly benefits consumers by allowing them to get out of a bad situation or move to find a new job.
“The most recent state economic report shows a housing market that is beginning to recover,” Ferguson said. “While other factors are also at play, the settlement is achieving its goal of reducing foreclosures and helping families stay in their homes.”
Previous settlement benefits:
· Foreclosure relief funding: Under the settlement, Washington previously received roughly $44 million in direct assistance to fund programs to help homeowners. The state distributed those funds in August 2012 to 13 non-profit and governmental organizations to provide legal representation, mediation and counseling services, address blight and offer direct relief to families.
· Direct cash assistance: The settlement also provided $24 million in direct cash assistance for states to distribute to families served by the five banks who were improperly foreclosed on between Jan. 1, 2008 through Dec. 31, 2011. Washington has received claims forms from borrowers eligible for these payments and expects to send checks to families in May or June 2013.
The historic legal agreement settled claims by 49 states and the federal government that loan servicers had processed home foreclosures without obtaining documents establishing the origin of the loans. Aside from the monetary penalties, the banks also agreed to unprecedented servicing and foreclosure standard reforms.
· Even if homeowners are offered relief through the national settlement, they will need the assistance of a housing counselor to complete the necessary paperwork. Families can contact a free housing counselor to assist them with mortgage issues by calling 1-877-894-HOME (4663).
· Borrowers should never pay for assistance with a home mortgage issue; housing counselors will assist you for free. If you feel you are a victim of a loan modification scam, please contact our office.