Banks officially fulfilled the consumer relief obligations of the National Mortgage Settlement and provided more than $50 billion of gross relief, which equates to more than $20 billion in credited relief, the Office of Mortgage Settlement Oversight said.
“I am happy we have gotten where we are and achieved this milestone in terms of consumer relief,” Joseph Smith, monitor of the National Mortgage Settlement said. “It was done in a shorter period of time than I could have hoped for and provided a lot of relief to a lot of families.”
On Tuesday morning, Smith filed with the U.S. District Court for the District of Columbia the final crediting reports on Bank of America (BAC), JPMorgan Chase (JPM), Citi (C) and Wells Fargo (WFC) on how the servicers gave consumer relief.
The office found that more than 600,000 families received some form of relief, which was broken into 17% refinancing assistance, 37% first lien principal forgiveness, 15% second lien principal forgiveness and 31% other relief.
In total, Bank of America, Chase, Citi, Wells Fargo and ResCap provided $8.6 billion, $4.2 billion, $1.8 billion, $4.3 billion and $200 million, respectively, in total relief obligations.
As a result, the office found that this bipartisan settlement among 49 states, the federal government and mortgage servicers resulted in an unprecedented amount of consumer relief.
“Further, the settlement incentivized the servicers to provide relief early, which meant distressed borrowers benefited from the relief within 18 months of the settlement’s effective date,” Smith said.
“The settlement parties negotiated a strong agreement that allowed me to implement a rigorous review process, keeping the servicers accountable to their obligations and, I hope, inspiring confidence in the government parties and the public that the servicers in fact satisfied their consumer relief and refinancing obligations,” he added.
From here, Smith explained he was impressed that rather than the banks only helping a few borrowers and throwing others back, the servicers claimed credit for all of them, causing a lot more relief to be provided than what was required.
But while this was a major milestone, it is not over for banks. Smith said that they will continue to monitor the servicers and are only about halfway through the settlement process. The office will continue to test the servicers’ compliance with the settlement’s servicing rules.