As a result of the massive mortgage servicing settlement announced in 2012, homeowners have received more than $45 billion in relief, the Department of Housing and Urban Development announced Thursday. But there is still work to be done, says HUD Secretary Shaun Donovan.
The settlement has resulted in more than 550,000 homeowners receiving on average $82,000 per household, according to a progress report from the Office of Mortgage Settlement Oversight.
“As we reach the one year anniversary, the latest report marks a major milestone in our efforts to assist struggling homeowners,” said HUD Secretary Shaun Donovan. “We have already surpassed our initial expectations and the settlement is testament to the fact that large scale principal reduction can be used an important tool in our efforts to prevent foreclosures without incurring negative results.”
Of the overall relief, more than $22 billion has been in the form of debt forgiveness, in that servicers have allowed borrowers to reduce principal and stay in their homes. The result has been the lowering of monthly payments for more then 266,000 loans and has reduced loan balances by 84,000 on average, according to the report.
“Now that we have clear signs that our housing market has gained momentum, and it is clear that this settlement is providing some of the critical tools for that momentum to continue,” said Donovan. “The job’s not done – and we will continue to watch the banks like hawks to ensure they live up to their obligations as they complete their consumer relief requirements and we measure their progress on implementing new and improved servicing standards.”
Written by Elizabeth Ecker
