Compensation checks to borrowers who submitted claim forms as part of the National Mortgage Settlement will likely be mailed out by “mid-year 2013,” according to a brief update on the settlement’s website.
Details remain sparse, but the exact amount of the payments to be mailed to each eligible claimant is “not yet known.”
However, “it will exceed the minimum payment of $840 that was indicated on the claim form,” the site’s statement said.
About $1.5 billion under the settlement with the top five mortgage lenders are being used to compensate borrowers who lost their home to foreclosure between January 1, 2008, and December 31, 2011.
Claim forms were mailed to eligible borrowers in late September/early October of 2012. The deadline to respond was Jan. 18 of this year.
The $25 billion National Mortgage Settlement was announced a year ago, and is separate from the Independent Foreclosure Review, which was transformed into an $9 billion settlement with 13 banks last month. The newest $9 billion deal is tied to shoddy foreclosure procedures or improper evictions from 2009 and 2010.
The National Mortgage Settlement stemmed from revelations that lenders allowed the improper “robo-signing” of foreclosure documents that were unverified, and in many cases, inaccurate. The five mortgage servicers that are parties to the settlement: Ally/GMAC; Bank of America; Citi; JPMorgan Chase; and Wells Fargo.
According to an update from the settlement’s “monitor” today, the banks completed $45.83 billion in relief to affected borrowers during the first ten months of the settlement’s compensation phase, March 1, 2012-December 31, 2012.
Nonetheless, the settlement has come under fire from consumer advocates for failing to help most borrowers stay in their homes.
Short sales accounted for more than one-third of the 2012 relief amount, or $19.5 billion. In short sales, the home is sold for less that what is owed. But that means the borrowers were not able to stay in their homes.
Here’s the breakdown from the settlement monitor’s update released today.
Consumer relief highlights (March 1 – December 31, 2012)
For state-by-state information, click here.
- Total consumer relief – $45.83 billion
- Relief to support home ownership – $24.698 billion
- Completed first lien modification forgiveness – $6.04 billion
- Completed forgiveness of pre 3/1/2012 forbearance – $1.369 billion
- Estimated consumer relief of refinances completed – $2.209 billion
- Active trials in progress – $3.486 billion
- Completed second lien modifications and extinguishments – $11.594 billion
- Short sales completed/deficiency forgiven – $19.505 billion
- Other programs – $1.627 billion