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So far, the big mortgage servicers have received stellar report cards for their compliance with the $25 billion national settlement. That could change this year as testing gets tougher -- potentially costing these companies further embarrassment and penalties.
January 2 -
The volume of complaints lodged by distressed borrowers to four of the largest U.S. banks has stabilized, the monitor for the national mortgage settlement says.
February 19 -
They are inching closer to complying with the $25 billion national settlement but the latest report from monitor Joseph Smith has found that there is still a little more work to be done.
December 4
The nation's top four top banks have satisfied their consumer relief and refinancing obligations under the national mortgage settlement and have until next year to comply with the agreement's servicing standards.
In a report released Tuesday, Joseph A. Smith Jr., the settlement's monitor, gave the banks credit for $20 billion in consumer relief less than half of the total relief provided. To encourage banks to reduce principal balances, the settlement gave only partial credit for other forms of relief, such as short sales or refinancings.
Bank of America (BAC), Citigroup (NYSE:C), JPMorgan Chase (JPM) and Wells Fargo (WFC) provided a combined $50 billion in total consumer relief to more than 600,000 distressed borrowers as part of the settlement struck with federal regulators and 49 state attorneys general in early 2012. The mortgage settlement was designed to address servicing abuses that led to the robo-signing of foreclosure documents. Smith has been releasing periodic reports on the servicers' progress.
The report showed that B of A alone provided a total of $27.3 billion in total gross relief more than what was required in the settlement from all five banks combined.
"This report shows that the settlement accomplished what it set out to do," Smith said. "If I had to wish for an outcome, this is close to it. But there's still a lot of work to do on the servicing standards side and compliance with rules on how to handle distressed borrowers."
Smith filed "crediting reports" Tuesday with the U.S. District Court for the District of Columbia confirming that the top banks have fulfilled their obligations. He previously certified that Ally Financial, formerly known as GMAC,
From the beginning,
The largest share of the consumer relief 37% did ultimately come in the form of first lien principal forgiveness. Short sales and deeds in lieu of foreclosure accounted for 31% of credit relief, followed by 17% for refinancing assistance and 15% for second lien forgiveness, Smith said.
The settlement requires that at least 30% of total consumer relief come from first lien mortgage modifications, and that a combination of first and second lien mods equal at least 60% of relief.
