Schneiderman announces $1.8 billion in relief for New York homeowners from national mortgage settlement

September 27, 2013 Updated Feb 21, 2013 at 12:41 PM EDT

By WKBW News

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Schneiderman announces $1.8 billion in relief for New York homeowners from national mortgage settlement

September 27, 2013 Updated Feb 21, 2013 at 12:41 PM EDT

(WKBW release) Following the release of the second official report on the implementation of the National Mortgage Settlement on Thursday, Attorney General Eric T. Schneiderman noted encouraging progress on behalf of New York State homeowners.

According to a news release:

The report, which was issued today by the settlement’s national monitor showed that over $1.8 billion 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 1st and 2nd 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,” said Attorney General Schneiderman. “My office will hold servicers accountable and ensure that every institution lives up to their end of this Agreement.”