Attorney General George Jepsen said mortgage modifications and other forms of relief resulting from the $25 billion national mortgage foreclosure settlement are reaching Connecticut’s distressed homeowners more quickly than anticipated.
The latest report Monday by the national settlement monitor shows that nearly 3,000 Connecticut borrowers received approximately $185 million in debt relief between March 1 and Sept. 30. The total does not include approved refinancing in process for several hundred homes, as well as an additional $72 million in loan modifications that will help nearly 700 Connecticut homeowners.
“When the settlement was announced in February, we estimated that Connecticut borrowers would receive approximately $155 million in benefits through first- and second-lien principal reductions, refinancing, short sales, deficiency waivers and other forms of relief,” Attorney General Jepsen said. “I’m very pleased and encouraged that we are exceeding those estimates for total consumer relief in Connecticut.”
The $185 million represents the amount of debt that Connecticut borrowers will no longer have to pay back. The average benefit was nearly $65,000. Jepsen said if the trend continues, the amount of relief received by Connecticut borrowers will “significantly exceed our estimates.”
All Connecticut borrowers having difficulty paying their mortgages should contact their loan servicing companies to ask about available options, Jepsen said. He also encouraged borrowers to consider any loan modification applications or refinancing solicitations made by their loan servicers.
The last report in August showed 1,043 Connecticut borrowers receiving some form of debt relief between March 1 and June 30, 2012, totaling about $65 million, or $63,000 on average. The totals are cumulative.
The report was issued by Joseph A. Smith Jr., the national monitor responsible for overseeing compliance by the nation’s five largest loan servicing companies to a settlement agreement which took effect April 5. Bank of America, CitiMortgage, Inc., Ally Financial, Inc., J.P. Morgan Chase Bank and Wells Fargo agreed to the settlement with 49 states and the federal government.
Jepsen was part of the executive committee of Attorneys General that helped to negotiate the settlement agreement, which required the nation’s largest banks to provide $17 billion in debt reduction and other relief to homeowners within three years. The agreement requires that 60 percent of the credited relief be in the form of either first- or second-lien principal reduction and $3 billion must be in the form of refinancing.
The settlement also required the companies to implement 304 servicing standards, aimed at improving the quality of service they provide to their customers, and ensuring the integrity of the documents they file in bankruptcy and foreclosure proceedings.
The banks reported to the monitor that they had met the Oct. 2, 2012 deadline for compliance, although complaints are still being made by some homeowners in Connecticut and across the country.
Assistant Attorneys General Joseph Chambers, Finance, and Matthew Budzik, head of the Finance department, are assisting the Attorney General with this matter.
View monitor’s report here
For more information on the settlement: http://www.ct.gov/ag/cwp/view.asp?a=2105&q=498966
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