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Attorneys General Mortgage Servicer Consent Order

Attorneys General Mortgage Servicer Consent Order. March 13, 2012. SERVICERS. Five largest servicers: Ally/GMAC Bank of America (and Countrywide) Citi JP Morgan Chase (and WaMu ) and Wells Fargo (and Wachovia) These banks service more than 60% of mortgage loans.

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Attorneys General Mortgage Servicer Consent Order

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  1. Attorneys General Mortgage Servicer Consent Order March 13, 2012

  2. SERVICERS • Five largest servicers: • Ally/GMAC • Bank of America (and Countrywide) • Citi • JP Morgan Chase (and WaMu) and • Wells Fargo (and Wachovia) • These banks service more than 60% of mortgage loans

  3. Relief Under Consent Order • Injunctive relief, including 42 pages of servicing standards. • $25 billion nationwide in monetary relief, including: • Payments for civil penalties and housing assistance. • Various programs for assistance for homeowners and people who lost their homes to foreclosure.

  4. Financial Relief for Borrowers • Three buckets of relief: • Restitution to people who lost their homes through foreclosure; • Refinance program for borrowers who are current but underwater; and • Principal reduction for borrowers who are in default and other forms of relief.

  5. Relief for Marylanders • More than $900 million in projected benefits for Marylanders • Estimated $24 million in restitution to borrowers who lost their homes • Estimated $64 million in benefit to borrowers through refinancing • Estimated more than $800 million in benefits through National Consumer Relief Program, including principal reduction.

  6. Restitution to borrowers who lost their homes to foreclosure • Estimated $24 million to Marylanders • Borrowers • Whose loans were serviced by one of the 5 servicers • Who lost their homes through foreclosure between January 1, 2008 and December 31, 2011; • Who meet certain criteria; and • Who return claims forms showing they are entitled to relief under the Consent Order.

  7. Restitution Process • Claims administrator will send claims forms • Borrower must return the claims form • Claims forms will be reviewed to determine eligibility • Payments will be sent – estimated to be between $1,000 and $2,000.

  8. Refinancing for borrowers who are current but underwater • Estimated $64 million in benefit to Marylanders • The loan must • be owned (not just serviced) by the bank • have a current rate at 5.25% or above. • be current with no delinquencies in the past 12 months • be a fixed rate loan, or an adjustable rate or interest only loan with an initial period of 5 years or more • have a current LTV greater than 100% • have been originated prior to January 1, 2009 • not have been modified in the past 24 months • have an unpaid principal balance at or below GSE conforming loan limit cap as of January 1, 2010 • The loan cannot be • FHA/VA • for manufactured housing • for a borrower who has been in bankruptcy within the last 24 months • for a borrower who has been in foreclosure within the last 24 months

  9. Restitution for current, underwater loans continued • Servicers are required to solicit borrowers who qualify for the refinance program. However, if you have a borrower who meets the criteria, we encourage you to contact the bank about refinancing the borrower’s mortgage.

  10. Consumer Relief Menu • Estimated $800 million in benefit to Maryland borrowers • Servicers are required to establish programs to help borrowers. Each servicer is required to provide a specified amount of benefit to borrowers.

  11. Principal Reduction • 60% of menu credits -- principal reduction of mortgages on occupied properties. • Loan must be 30 days delinquent or otherwise be at imminent risk of default due to borrower’s financial situation. • LTV greater than 100%. • Loan may not be owned by GSE. • Loan must meet other criteria for program.

  12. Other Benefits • Other forms of assistance include: • Facilitating short sales; • Providing transitional funds; • Providing forbearance for unemployed; and • Providing deficiency waivers.

  13. Implementation • Servicers will be notifying qualified borrowers. • However, borrowers who may qualify should reach out to servicers.

  14. Bank Contacts • Ally/GMAC: 1-800-766-4622 • Bank of America (And Countrywide): 1-877- 488-7814 • Citi: 1-866-272-4749 • JPMorgan Chase (And WaMu): 1-866-372- 6901 • Wells Fargo (And Wachovia) : 1-800-288-3212

  15. Servicing Standards for Owner-Occupied Properties • Standards for Documents Used in Foreclosure and Bankruptcy Proceedings. • Standards for systems and personnel. • Requirements to ensure accurate account information. • Oversight of third-party providers.

  16. Servicing standards continued • Loss Mitigation Requirements • Dual Track Restricted • Single Point of Contact • Loss Mitigation Communications with Borrowers • Development of Loan Portals • Loan Modification Timelines • Independent Evaluation of First Lien Loan Modification Denials

  17. Servicing standards continued • Protections for military personnel • Restrictions on servicing fees • Force-placed insurance requirements • Honor tenants’ rights

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