Marylanders received more than $1.3 billion in relief from the National Mortgage Settlement during a 12-month period, Attorney General Douglas F. Gansler announced Tuesday.
That assistance went to nearly 17,000 mortgage borrowers between March 1, 2012 and March 31, 2013, Gansler said. The total amount allocated so far is $400 million more than the original estimate of the settlement’s total financial relief.
Plus, the relief amount announced Tuesday does not include one-time cash payments that will soon be made to borrowers who lost their homes to foreclosure in the period from 2008 through 2011 and whose mortgages were serviced by one of the five settling banks, Gansler said.
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People in Maryland who are eligible for those one-time payments, which are expected to be more than $840 each, and met the application deadline should begin receiving them next month, the attorney general said.
“Thousands of Maryland families have been able to stay in their homes or escape dire financial circumstances under this settlement,” Gansler said. “Each family that struggled through the housing crisis and is now able to stay in their home helps to stabilize neighborhoods and home prices for everyone else.”
The financial relief that is included in the $1.3 billion distributed so far includes mortgage modifications, principal reductions, deficiency waivers, refinancing and short sale assistance.
“The settlement has delivered meaningful and needed relief in Maryland”, said Mark Kaufman, Maryland’s commissioner of financial regulation. “Reported benefits to Maryland homeowners thus far are roughly equivalent to those delivered in Pennsylvania and Virginia, combined.”
The settlement was the result of accusations that the five largest mortgage servicers in the U.S. engaged in abusive servicing and foreclosure practices, including robo-signing — the practice of creating foreclosure documents in an assembly-line fashion without verifying their accuracy.
Wells Fargo, Bank of America, Citigroup, JPMorgan Chase and Ally Financial entered into the settlement last year with 49 states’ attorneys general and the federal government to resolve the allegations.
The update on the settlement released Tuesday reported that nationwide $52.6 billion in consumer relief has been distributed to about 636,000 borrowers — roughly $81,000 per homeowner.
Shaun Donovan, the secretary of Department of Housing Urban Development, said that the settlement has proven that “large-scale principal reduction is an important tool in preventing foreclosures.”
“Due to the efforts by 49 bipartisan state attorneys general and the federal government, hundreds of thousands of people are able to stay in their homes or avoid foreclosure, preventing the erosion of the social fabric of our communities,” Donovan said.
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