The National Mortgage Settlement’s relief is not reaching enough Maryland homeowners and is not as effective as it could be in keeping people in their homes, the Maryland Consumer Rights Coalition said Tuesday.
“The number of Maryland families facing new foreclosures continues to dwarf those getting help under the settlement,” said Marceline White, the group’s executive director, in a statement.
Between March 1, 2012 and the end of last year, about 14,200 homeowners received assistance through the settlement, intended to resolve accusations by 49 states and the federal government that five major mortgage servicers abused borrowers during the foreclosure process.
During the same nine-month period, though, notices of intent to foreclose were sent out to nearly 131,000 homeowners, according to MCRC’s review of the settlement monitor’s third progress report, which was released last week, and statistics from Maryland’s labor department.
“The relief offered under the settlement doesn’t begin to match the scale of the foreclosure crisis,” White said.
The servicers bound by the settlement — Wells Fargo, Bank of America, Citigroup, JPMorgan Chase and Ally Financial — are also failing to provide ample principal reductions, an effective tool in keeping people in their homes, according to MCRC. Instead, the servicers are opting to arrange short sales, which result in homeowners losing their residences, the group said.
“Since the settlement was signed, the five big banks that are part of the settlement have provided 3,450 Marylanders with short sales relief, while providing principal reductions for 1,583 families,” MCRC said.
The MCRC’s full analysis of the settlement monitor’s third report can be found here.
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