Media Center

Banks Complete Relief Obligations Under National Mortgage Settlement
 

Thousands of Wisconsin Borrowers Assisted

 

 MADISON — Attorney General J.B. Van Hollen has announced that four reports were filed with the U.S. District Court for the District of Columbia confirming that the banks have satisfied their consumer relief and refinancing obligations under the National Mortgage Settlement.  Joseph A. Smith, Jr., Monitor of the Settlement, filed the reports on Bank of America, Chase, Citi and Wells Fargo. A summary report from the Monitor can be downloaded here; a fact sheet is available here.

 

“This landmark settlement has provided unprecedented relief to thousands of borrowers in Wisconsin,” Attorney General Van Hollen said. “While these reports mark the end of the consumer relief portion of the National Mortgage Settlement, our work is ongoing.  The banks are still obligated to adhere to strict servicing standards under the Settlement, and my office will continue working with homeowners to ensure the banks are complying with those obligations.”


Under the Settlement, announced in 2012, 18,746 Wisconsin consumers have received some sort of assistance.  More than $22 million in direct payments has been received by more than 15,000 Wisconsin residents who lost homes to foreclosure from 2008-2011.  In addition, 3,726 borrowers received nearly $176 million in gross loan-related relief.  The reports filed only address the portion of the settlement that obligated banks to give homeowners loan-related relief.  Loan-related relief includes refinancing, principal reduction, mortgage modification offers, second-lien forgiveness, short sales and enhanced transition assistance, among other options to homeowners.

 

The Monitor reported that $50.46 billion of loan-level relief, in gross dollars, has been provided to 600,000 borrowers nationally. This amounts to $20.6 billion in “credit” under the Settlement, because the Settlement does not credit all relief as dollar for dollar. The Settlement was designed to provide more credit for certain types of relief, such as first and second lien modifications for occupied residences.  The Settlement also required that the majority of credited relief be designated for first and second lien forgiveness and in refinancing relief.  The breakdown of the credited relief follows:
 

  • 37 percent of credited total relief was in the form of first lien principal forgiveness;
  • 15 percent of credited total relief was in the form of second lien principal forgiveness;
  • 17 percent of total credited relief was in refinancing assistance; and
  • 31 percent from other relief, including assistance for short sales and deeds in lieu of foreclosure.

 

The Monitor and his professional firms continue to review the banks’ compliance with the Settlement’s servicing standards. The Monitor plans to submit his third report to the Court concerning the servicing standards in the coming months.
 

Wisconsin residents who have questions about the National Mortgage Settlement are encouraged to contact the Wisconsin Department of Justice (DOJ) at: consumerprotection@doj.state.wi.us, 800-998-0700 or 608-266-1852.  The DOJ has trained staff available to assist consumers and provide resources.

 

Assistant Attorney General Holly Pomraning represented the state in the National Mortgage Settlement, and serves as the Department’s Special Assistant Attorney General for Mortgage Foreclosure Mitigation.