DENVER – August 22, 2013 – (RealEstateRama) — Joseph A. Smith, Jr., Monitor of the National Mortgage Settlement, issued his final report today regarding the total amount of . The banks disclosed that from March 1, 2012 through June 30, 2013 they have extended $51.33 billion in total relief to 643,726 borrowers nationwide. These figures include principal forgiveness that is granted to allow customers to reach a loan modification that lowers their mortgage payments or loan forgiveness that is needed to allow a homeowner to get a short sale.
In Colorado, 7,539 borrowers have received more than $425 million in loan relief under the settlement. Smith reports that all of the banks have reported that they have completed or are nearly finished with their financial obligations under the settlement. This $51.33 billion figure, therefore, represents nearly the final relief granted under the settlement.
“I am very pleased with total amount of relief that has been delivered to homeowners during the 16 months these programs were offered under the settlement,” said Colorado Attorney General John Suthers. “It was initially estimated that up to $32 billion in total relief would be delivered to homeowners in need of assistance. The final results exceed all expectations that we had at the outset of this historic settlement. It’s good news for homeowners trying to save their homes and has gone some distance in stabilizing our housing market,” continued Suthers.
The Colorado Division of Housing reports that foreclosure rates continue to fall and that home values are improving. There is still a need for this relief to continue to reach Colorado homeowners, especially in those parts of the state that are not recovering as quickly. Because of funding that was made available under the settlement, there are still resources available throughout Colorado for homeowners who are struggling to save their homes. Homeowners who are behind on their mortgages or facing foreclosure are encouraged to contact the Colorado Foreclosure Hotline at 1-877-601-4673 (HOPE). The free hotline works with homeowners in or facing foreclosure. Homeowners who call the hotline may speak with a housing counselor about their options.
The Monitor will now turn his attention to determining whether this relief activity satisfies the banks’ overall $20 billion obligation under the settlement. Not all loan relief is credited at the same rate for purposes of calculating the credits earned towards the $20 billion obligation. Most principal forgiveness that is granted to allow a loan modification is credited dollar-for-dollar. For activities like short sales, however, the banks earn .45¢ per dollar of loan forgiveness. The credit can be as little as .10¢ for each dollar for waiving a deficiency balance on loan.
The Monitor’s next report will tally the credits that the banks have earned for these various activities. More information about the National Mortgage Settlement is available at www.nationalmortgagesettlement.com. Further information about Joseph Smith and the Office of Mortgage Settlement Oversight is available at www.mortgageoversight.com.
