The National Mortgage Settlement has provided relief to Florida homeowners in its first 12 months, with more to come over the next two years. Unlike previous federal programs, relief is available to eligible homeowners that are current on their mortgages and those that are in default.
There is exciting news on the National Mortgage Settlement front! The first year of monitoring reports are in and looking surprisingly sunny for Florida homeowners. The good news is that during the first year of the settlement term, Florida homeowners have received significant financial relief. The even better news is that hundreds of millions of dollars of consumer relief requirements consisting of direct financial benefits are still due and owing to Florida Homeowners and must be met in the next two years.
As a bit of background, in April of 2012, the nation’s five largest mortgage servicers, Bank of America, Wells Fargo, Citi, JP Morgan Chase and GMAC/Ally (the “Big Five”) entered into The National Mortgage Settlement, a landmark $25 billion joint federal/state settlement to resolve various mortgage origination, servicing and foreclosure abuses. Florida’s share is estimated at $8.4 billion, the benefits of which are to be implemented over a three year settlement term with independent oversight by Joseph A. Smith, Jr., the appointed Monitor.
The settlement consists of three general parts: direct payments to borrowers and states, consumer relief requirements, and mandatory compliance with over 300 new mortgage servicing standards. Florida homeowners are slated to receive consumer relief benefits of over $7.6 billion by way of first and second lien loan modifications, principal balance reductions, short sale assistance and deficiency waivers, refinancing underwater mortgages at current rates and special programs for unemployed homeowners and military service members. Unlike previous federal programs, relief is available to eligible homeowners that are current on their mortgages and those that are in default.
However, despite the progress made by the Big Five during the first year, Mr. Smith recognized in his recent testimony before a Senate Subcommittee that “… problems with servicing standards, including single point of contact, dual tracking and the loan modification process in general are still occurring far too often.” Translation: they are making progress, but still have a lot to accomplish to meet the required terms of the settlement agreement. If your mortgage loan is serviced by one of the Big Five, contact your servicer ASAP to find out if you are eligible for relief. The Big Five each have designated National Mortgage Settlement Help Numbers:
Bank of America: 877-488-7814
Wells Fargo: 800-288-3212
Although loans owned by Fannie Mae or Freddie Mac are NOT eligible for relief under the National Mortgage Settlement, each have programs designed to assist homeowners in default, as well as the HARP program which permits borrowers that are current on their underwater mortgages to refinance and take advantage of current market rates.