Introduction
Joseph Smith from the Office of Mortgage Settlement Oversight releases a progress report
About the First Take Report
“It has been nearly five months since the settlement went into effect, and I believe it is important to report on our progress,” said Smith. “This report is not required by the settlement and contains information given voluntarily to me by the banks. It is intended to be the basis of a national conversation about the servicers’ efforts to meet their obligations under the settlement. More hard work remains as the banks work to meet their obligations. My colleagues and I look forward to that work and to keeping policymakers and the public informed of our progress.”
On Aug. 29, 2012 Smith released a progress report to help the public and policymakers understand the major components of the settlement and also to provide preliminary statistics regarding banks’ the progress that banks have made so far.
Under the settlement, the five banks combined will provide approximately $20 billion in consumer relief, which will be offered in several ways over the next three years. For instance, banks could modify loans for struggling homeowners trying to avoid foreclosure or for underwater homeowners who owe more than what their properties are worth. Banks could provide forbearance relief for the unemployed or offer a “deficiency waiver” in the case of a short sale. Additionally, banks can provide special assistance to members of the armed forces, anti-blight programs and other types of assistance.
Consumer relief highlights:
- Total consumer relief- $10.6 billion
- Completed first lien modification forgiveness- $749.4 million
- Completed forgiveness of pre 3/1/2012 forbearance- $348.9 million
- Short sales completed/deficiency forgiven- $8.7 billion
- Completed second lien modifications and extinguishments- $231.4 million
- Estimated consumer relief of refinances completed- $4.9 billion
- Other Programs- $458.8 million
The National Mortgage Settlement establishes a number of new rules – or servicing standards – that are designed to correct past abuses and benefit homeowners. There are 304 servicing standards that address the following issue areas: foreclosure process, loan modification, customer service, fees, documentation and military personnel. The goal is to stop past abuses, such as robo-signing or dual tracking, improve the accuracy of information, provide better communication, and make foreclosure a last resort, among other benefits.
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