A last minute addition to the program for Saturday was a presentation on the nation wide mortgage settlement between the states’ Attorneys General and the five major servicers.
Here are my notes from the presentation by Joseph A. Smith, Jr. the court appointed monitor of the settlement. The presentation was accompanied by a concise and remarkably thorough summer of the settlement prepared by Norma Hammes.
Settlement applies to the five named servicers, Ally (formerly GMAC), Bank of America, Citibank, JPMorgan Chase, and Wells Fargo.
$5B to fed and state governments includes money for the cash payments to borrowers wrongly foreclosed.
He’s to enforce servicing standards and principal foregiveness commitments.
There are side agreements with some states including California.
He will report to NACBA.
His site Www.mortgageoversight.com is a face for the program with consumers.
He will hire professionals to audit bank compliance. Target is end of May.
His engagement is for 3.5 years plus final report.
Servicing standards in the agreement apply to all loans, including Fannie & Freddie loans. Principal write down imposed only on the 5 servicers, as to non Fannie-Freddie loans.
He’s interested in independent credible info that banks aren’t complying with standards, he can get additional info from servicers.
He has enforcement capability. He can go back to court who approved the settlement.
His goal is to assure confidence of American people in financial system.
If client has been foreclosed, they may get $1500-2000; be aware if filing bankruptcy consider the claim as a property of the estate.
Clients trying to modify loans that are 120 days delinquent or less are entitled to dual track protection, preventing bank from talking modification while proceeding to foreclose.
Some write downs are happening now, from BofA, without application. Banks get extra credit for write downs occurring in the first year of settlement.
Settlement doesn’t give any particular client any rights.
Bankruptcy debtors can’t qualify for refinance and must have been out for 24 months.
Agreement provides that accepting benefits under settlement does not require waiver of any claims.