The nation’s largest mortgage servicers have distributed $50.63 billion in direct relief to over 620,000 homeowners, or roughly $81,000 per homeowner as part of the National Mortgage Settlement, according to a progress update released today by independent settlement monitor Joseph A. Smith of the Office of Mortgage Settlement Oversight. Over one year ago, the Department of Justice, Department of Housing Urban Development (HUD) and 49 state attorneys general reached a landmark agreement with the nation’s five largest mortgage servicers to address mortgage loan servicing and foreclosure abuses. The Monitor’s state-level data can be downloaded here. A fact sheet summarizing national consumer relief can be downloaded here. Read Secretary Donovan’s statement on today’s news here.
The report demonstrates significant progress on the broadest and most robust principal reduction program in the nation’s history. Nearly $30 billion of the overall completed consumer relief has come in the form of principal forgiveness and refinancing. Because of the settlement, the principal reduction helps borrowers stay in their homes, lowering monthly payments on over 310,000 loans and actually reducing struggling homeowners’ loan balances by more than $83,000 on average.
Ms. Vinel Cooper in Philadelphia, PA knows first-hand how important this settlement has been. In October 2006, she purchased her home for $106,000. By November 2011, Ms. Cooper was desperately trying to save her home. She fell behind on her mortgage payments due to economic hardships, and was unable to pay down the missed payments even when her finances stabilized.
Ms. Cooper sought assistance directly from her mortgage servicer but kept getting the run around. The servicer continued to request the same information even though she had provided the information countless times. Meanwhile, the missed payments on her home continued to multiply leaving her dangerously close to foreclosure. At her wits end, Ms. Cooper contacted the Save Your Home Philly Hotline and they referred her to an Affordable Housing Centers of Pennsylvania (AHCOPA) counseling center. As a result, AHCOPA submitted a complete package to Ms. Cooper’s mortgage servicer for a loan modification that included principal reduction.
In July 2012, Ms. Cooper was granted a trial modification thanks to the National Mortgage Servicing Settlement. Her trial modification consisted of three timely payments of $689.83 after which her modification would become permanent. She never missed a payment and on January 7, 2013 her loan balance was officially reduced from $146,323.28 to $53,834.38. In total, Ms. Cooper had over $90,000 both in principal and arrears forgiven.
Thanks to Ms. Cooper’s persistence, AHCOPA and the National Mortgage Servicing Settlement, Ms. Cooper is now able to stay in her home, comfortably afford her mortgage, and actually have equity in her home.
And today we learned that more than 600,000 responsible homeowners, like Ms. Cooper, received relief from the National Mortgage Settlement. To read more details on the mortgage settlement or to find out where to get assistance visit National Mortgage Settlement.