Jamie Smith Hopkins
6:00 AM EDT, September 4, 2012
Just over 2,800 Marylanders have received some aid through the national mortgage-servicing settlement this year, with nearly 2,000 others in process, according to the settlement's monitor.
The assistance, valued at $224 million, ranges from principal reduction to refinancing underwater borrowers. The average rate reduction for refinancing? More than 2 percent.
Five mortgage servicers -- Wells Fargo, Bank of America, Citigroup, JPMorgan Chase and Ally Financial (the former GMAC) -- agreed to the settlement, approved by a federal judge in April. All reported to the settlement monitor that they have extended aid to Marylanders, but not all have offered aid in each category.
Bank of America, for instance, reported no completed refinancings or principal reduction in Maryland -- unless you count the 17 people whose second-lien mortgages it completely extinguished. The company told the monitor that it had helped 1,134 Marylanders, largely by permitting short sales with the remaining mortgage balance forgiven.
Short-sale forgiveness also accounted for the biggest categories of aid to Marylanders from Ally and Chase.
Nearly a quarter of Marylanders given aid by Citi got short sales, but the company's biggest category of assistance was forgiving deferred principal from loan modifications made before the settlement.
Marylanders serviced by Wells Fargo were most likely to get refinancing aid, according to the settlement monitor.
Throughout the foreclosure crisis, borrowers, attorneys and housing counselors across the country complained of widespread problems in mortgage servicing (some of which is detailed in this story). So the settlement includes new servicing rules intended to essentially mandate better customer service, and not just for those facing foreclosure.
It's a work in progress. Joseph A. Smith, the settlement monitor, said in his report that about 1,300 borrowers visiting his mortgageoversight.com site have shared their servicing issues -- many complaining about loan modification, customer service, documentation and fees. Forty-four of the submissions came from Marylanders.
What's your mortgage-servicing experience?
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