The nation’s largest mortgage servicers have distributed $26.1 billion in direct relief to nearly 310,000 homeowners, or roughly $84,385 per homeowner as part of the National Mortgage Settlement, according to a progress report released this week by independent settlement monitor Joseph A. Smith of the Office of Mortgage Settlement Oversight. Earlier this year, 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.
“At a moment when Americans have been looking for Washington to put partisanship aside to deliver results, Monitor Smith’s report indicates that families and struggling homeowners can get what they are promised when we work together,” says HUD Secretary Shaun Donovan.
The report demonstrates significant progress on the broadest and most robust principal reduction program in the nation’s history. More than $19.4 billion of the overall completed consumer relief has come in the form of debt forgiveness. Because of the settlement, banks have provided over $10.5 billion in principal reduction that helps borrowers stay in their homes, lowering monthly payments on over 118,000 loans and actually reducing struggling homeowners’ loan balances by more than $88,000 on average.
In addition, to date, States have allocated more than $1 billion of state settlement funds for housing-related purposes, including nearly $250 million to housing counseling and another $50 million to legal aid.
Adding to the benefits for consumers, as of October the five largest mortgage servicers—representing 60 percent of the mortgage market—were required to comply with tough customer service standards that are designed to put an end to the lost paperwork, dropped calls and runaround that harmed so many families.
“With servicers on track to fulfill much of their consumer relief commitments in the first year of this agreement, homeowners are finally beginning to see the light at the end of the tunnel,” says Donovan. “That’s encouraging news – for families, for neighborhoods, for our housing market and for the country.”
Read the full report and the Monitor’s state-by-state data map.