Intended to address widespread foreclosure abuses that occurred at the height of the housing crisis, the National Mortgage Settlement reached a major milestone this week. Joe Smith, the settlement monitor, announced that all five of the named banks have satisfied their consumer relief and refinancing obligations under the agreement. In total, the banks provided more than $50 million in credited relief nationwide, which translates to $20 billion in gross relief under the joint state-federal settlement.
Tennessee received an estimated $240 million in relief including $180 million in refinances, principal reductions, and approved short sales. Under the terms of the settlement, the majority of the credited relief went to help homeowners lower their mortgage payments and take them out of foreclosure. Over 4,000 Tennessee homeowners received some type of assistance under the settlement with an average individual benefit estimated at over $40,000.
The settlement included the nation's five largest mortgage servicers: Bank of America, JP Morgan Chase, Citi, GMAC/Ally Financial and Wells Fargo. After investigating complaints about foreclosure abuses from homeowners throughout the state, Tennessee participated on the multistate executive committee for 2012 settlement.
"We are pleased to see that Tennesseans have received substantial benefits under the National Mortgage Settlement," says Tennessee Attorney General Bob Cooper. "In working with homeowners throughout the state, we have seen firsthand how the settlement has allowed struggling homeowners to lower their monthly payments and avoid foreclosure."
The settlement's monitor will continue to review the banks' compliance with the Settlement's servicing standards. The standards require the five banks to evaluate homeowners for all options to foreclosure, including the federal Making Home Affordable Program, on a fair and timely basis. With the servicing standards still in effect, the Tennessee Attorney General's office will continue to work with homeowners who have disputes with the five banks.
The state of Tennessee has also set up a free mortgage assistance hotline for all homeowners regardless of who services their mortgage. If you're having trouble paying your mortgage, please call 1-855-876-7283. For a list of free housing counselors in your area, please visit http://www.keepmytnhome.org.