Four of the U.S. banks subjected to the 2012 national mortgage settlement – Bank of America, Chase, Citi and Wells Fargo – have satisfied their consumer relief and refinancing obligations under the settlement, according to final reports filed Tuesday by Joseph A. Smith, Jr., monitor of the settlement.
Smith had previously certified that the ResCap Parties (Ally) had fulfilled their obligations under the settlement.
According to the final crediting reports filed with the U.S. District Court for the District of Columbia, the banks provided more than $50 billion of gross relief, which translates into more than $20 billion in credited relief under the settlement. More than 600,000 families received some form of relief.
‘Among the five banks, 37 percent of credited total relief was in the form of first-lien principal forgiveness, while second-lien principal forgiveness made up 15 percent,’ Smith says in a statement. ‘Refinancing assistance made up 17 percent of total credited relief, and other relief, including assistance for short sales and deeds in lieu of foreclosure, accounted for 31 percent of credited relief. The settlement required that a majority of relief for which the banks received credit take the form of first and second-lien modifications and refinances, and my results show that, in many cases, the banks exceeded these requirements.
‘My team spent 36,000 hours reviewing and testing the consumer relief and refinancing activities reported by the banks,’ Smith adds. ‘Because of this extensive process, I'm confident in concluding that the banks have satisfied their obligations.
‘My reports mark the end of the consumer relief portion of the settlement,’ Smith continues. ‘Because of the way this landmark agreement was designed, an unprecedented amount of relief has been provided to consumers quickly and efficiently. Furthermore, I believe the rigorous testing process should justify public confidence that the banks have fulfilled their relief commitments and that the settlement has played a part in helping keep struggling borrowers in their homes.’
Smith says his office, along with the professional firms assisting with the settlement, will continue to review the banks' compliance with the settlement's servicing standards. He says he plans to submit his third report to the court concerning the servicing standards in the coming months.
Smith's office is also monitoring the $2.1 billion settlement with Ocwen Financial Corp. over faulty mortgage servicing that the Consumer Financial Protection Bureau and state attorneys general reached in December.