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State-Federal consent order promises mortgage relief, protection

(ALBUQUERQUE)—Attorney General Gary King’s office reports New Mexico consumers will be the beneficiaries of direct relief and new protections from a $25-million dollar national servicing joint state-federal settlement with the nations five  largest mortgage servicers.

The Consent Order was approved and entered against  five mortgage servicers by U.S. District Court Judge Rosemary M. Collyer.  Entities included in the settlement are: Bank of America Corporation, JPMorgan Chase & Co., Wells Fargo & Company, Citigroup Inc., and Ally Financial Inc. (formerly GMAC).

The Consent Judgment follows a joint complaint filed by the U.S. Department of Justice and state attorneys general from 49 states and the District of Columbia. The signed Consent Judgement accompanies this news release.

Borrowers who use any of the five mortgage service providers and are currently behind on their monthly mortgage payment, or may soon experience financial trouble, can call their mortgage servicer at numbers as listed below.

Participating Mortgage Servicer Consumer Numbers
Bank of America: 1-877-488-7814
Citigroup: 1-866-272-4749
Chase: 1-866-372-6901
Ally/GMAC: 1-800-766-4622
Wells Fargo:1-800-288-3212

The five mortgage servicers will now comply with comprehensive new mortgage loan servicing standards, provide substantial direct consumer relief and monetary payments, and will submit to an independent monitor, as part of a $25 billion national mortgage servicing joint state-federal settlement

As settlement programs are implemented, further information will be made available. The mortgage servicers are required to complete 75 percent of their consumer relief obligations within two years and 100 percent within three years. Consumers may need to wait before seeing direct benefits from the settlement.

The five mortgage servicers, as mentioned above, will implement extensive new servicing standards, which take effect in three phases over the next two to six months. These include:
Stop many past foreclosure abuses, such as robo-signing, improper documentation and lost paperwork through new mortgage servicing standards;

Require strict oversight of foreclosure processing, including of third-party vendors;

Impose new standards to ensure the accuracy of information provided in federal bankruptcy court, including pre-filing reviews of certain documents;

Make foreclosure a last resort, by requiring servicers to evaluate homeowners for other loan mitigation options first;

Restrict banks from foreclosing while the homeowner is being considered for a loan modification;

Set procedures and timelines for reviewing loan modification applications, and give homeowners the right to appeal denials; and,
Create a single point of contact for borrowers seeking information about their loans and adequate staff to handle calls.

The $25-million dollar national settlement provides for:
Servicers must provide a minimum of $20 billion in benefits directly to borrowers through a series of national homeowner relief effort options, including principal reduction. Servicers will likely provide up to an estimated $32 billion in direct homeowner relief through a complex system of settlement credits. Servicers also fund an underwater mortgage refinancing program for current, but underwater borrowers.

Under an enhanced agreement with Bank of America, the company will write down principal on a large number of underwater homeowners to market value, which is in addition to its existing principal reduction obligations under the settlement.
Servicers pay $5 billion to the states and federal government ($4.25 billion to the states and $750 million to the federal government).
Homeowners receive comprehensive new protections from new mortgage loan servicing and foreclosure standards (see below). Servicers will implement the new standards in phases over the next six months.

Service members receive new protections that go beyond the Service-members Civil Relief Act (SCRA).

Project allocations for New Mexico are under review and consideration, and will be announced soon.

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