More than 3,000 Delawareans benefit from national mortgage settlement
The Delaware Attorney General’s office announced recently that more than 3,000 Delawareans are receiving direct financial benefits from last year’s historic settlement with the nation’s five largest mortgage banks.
“The direct financial benefits that Attorney General Biden secured for Delaware from mortgage banks through the national settlement, along with our state’s recently extended foreclosure mediation program, are helping thousands of Delaware families avoid foreclosure,” said Chief Deputy Attorney General Ian McConnel. “In addition, the attorney general and his team have helped secure compensation for Delawareans for mortgage servicing abuse that happened in the past and have established tough new national servicing standards to prevent future abusive servicer conduct.”
In February of last year, Biden, 48 other attorneys general and the federal government reached a $25 billion settlement with five of the nation’s largest mortgage banks including Ally (formerly known as GMAC), Bank of America, Citi, JPMorgan Chase and Wells Fargo. The settlement resolved allegations of widespread mortgage servicing misconduct, including robo-signing of foreclosure documents by those banks.
The independent monitor appointed by the states and federal government to review the banks’ progress in meeting their obligations under the settlement announced recently that 1,297 Delaware families have benefited from the settlement through June 30, 2013.
The settlement terms Biden and others secured last year require the banks to reduce principal on mortgage loans, extinguish second lien mortgage loans, waive deficiencies in short sales, and provide refinancing to so-called “underwater” homeowners who are unable to refinance because they owe more than their homes are worth. In total, these principal reductions, refinancing and other benefits for the 1,297 Delaware homeowners now total more than $72 million, according to the monitor’s report. Another 425 Delaware homeowners are in the process of receiving an estimated $30 million more in benefits through trial modifications that have not yet been finalized.
This past June, as part of last year’s national mortgage settlement, 1,500 Delawareans who lost their homes to foreclosure began receiving checks in the mail. Eligible Delawareans were those individuals who had a mortgage serviced by one of the five participating banks, lost their home between 2008 and 2011 and submitted a valid claim form. The checks, which typically totaled $1,480, were paid by the five participating banks to former homeowners as a result of mortgage servicing abuses the banks may have committed.
In January 2012, as part of a sustained state response to the national housing crisis, Biden’s office launched the Delaware Mortgage Mediation Program, which requires lenders to have a meaningful face-to-face conversation with borrowers about alternatives to foreclosure before a foreclosure filing can proceed. Through legislation championed this spring by Biden, the mediation program was extended four additional years to 2018.
The 2012 national mortgage settlement also required the mortgage banks to implement hundreds of improvements to their operations, especially in customer service. Biden’s office insisted that protections for military members be included in those requirements.
Additional details about the mortgage relief provided by the five settling banks under the terms of the national mortgage settlement and Delaware-specific relief for each of the banks is posted on the independent monitor’s website at www.mortgageoversight.com/map.