Almost one year after the national mortgage settlement, 550,000 homeowners received support due to the nation’s largest mortgage servicers distributing $45.83 billion in direct relief, according to a independent settlement monitor Joseph Smith of the Office of Mortgage Settlement Oversight.
The Department of Justice, U.S. Department of Housing and Urban Development and 49 state attorneys general reached an agreement with the five largest mortgage servicers to address mortgage loan servicing and foreclosure abuses.
“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.
He added, “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.”
The report shows significant progress with more than $22.48 billion of the overall completed consumer relief coming in the form of debt forgiveness.
Additionally, because of the settlement, the principal reduction helps borrowers stay in their homes by lowering monthly payments on more than 266,000 loans as well as reducing homeowners’ loan balances by more than $84,000 on average, the report noted.
“The Justice Department, with our federal and state partners, negotiated the settlement as part of our ongoing commitment to protect American homeowners and taxpayers from unlawful mortgage servicer conduct,” said Acting Associate Attorney General Tony West. “As we approach the first anniversary of the landmark settlement, we are pleased that so many homeowners have been helped.”
Donovan noted that the settlement is providing critical tools for the housing market to continue gaining momentum.
“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,” he said.