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Wednesday, July 30, 2014

Government Set Up Mortgage Consent Decree so Where Did the $$$ Go

HMM.....According to the consent decree judgment from 2012, http://www.justice.gov/crt/about/hce/documents/scra_wellsfargo_settle.pdf , a lot of money was agreed to be put into an escrow account for those harmed by certain financial institutions. 

And do we know of any homeowners who actually got paid OUT of these funds?  We have not seen any stats on how many homeowners got paid out of the nationwide Mortgage Settlement (we cannot recall the exact name) but in any event when one applied for it, they send you a card which gives you a case number and in the end they "decide" how much your check would be.  

We have seen only one client's check so far, which was about $850. (Eight hundred fifty)  And that was a client that had equity in the house taken by Chase or Fannie Mae, probably more than $60k, and where the "servicer" Chase repeatedly ignored the full tender that was paid, and instead kept the owner in perpetual "default" but yet processed and filed a RECISSION in the County Recorder's Office, but then foreclosed anyway. Claiming that "Fannie Mae" owned the property. FM allegedly sold the property just last fall in 2013, which appears to be a continuing harm to us. There is a current lawsuit on that one. We seriously doubt there are many other cases as egregious.

OK, we did find this:    http://www.ncsl.org/research/financial-services-and-commerce/national-mortgage-settlement-summary.aspx    We show just some of the states but you can see all of them at the link.

NATIONAL MORTGAGE SETTLEMENT SUMMARY

For Sale Sign
The five largest mortgage servicers recently agreed to a $25 billion settlement over some questionable mortgage loan servicing and foreclosure practices, including the so-called “robo-signing” activities that came to light in late 2010. Robo-signing refers to the practice of signing mortgage documents without verifying their accuracy as well as other procedural errors. The five mortgage servicers—Ally Financial, Bank of America, Citigroup, JPMorgan Chase and Wells Fargo—collectively service nearly 60 percent of the U.S. mortgage market. While mortgage loan servicers collect and process mortgage payments and handle defaults and foreclosures, the servicers often do not own the underlying loans.
The national mortgage settlement—which involved more than a year of negotiations with the states’ attorneys general, the U.S. Department of Justice and other federal agencies—includes direct payments to the federal government, the participating 49 states and individual borrowers. 
Oklahoma was the only state not to join the settlement, choosing to settle separately with the five servicers for $18.6 million.
The federal government will receive $912 million for five whistleblower lawsuits and losses incurred by the FHA Capital Reserve Account, the Veterans Housing Benefit Program Fund and the Rural Housing Service. 
The 49 participating states will split $2.5 billion based on criteria such as the number of foreclosures and other factors, with California, Florida, Texas, New York and Illinois receiving the largest amounts respectively. The settlement agreement allows each state to designate up to 10 percent of the amount paid to each state as a civil penalty, fine or similar payment.
The National Association of Attorneys General will receive $15 million to create and administer the “Financial Services and Consumer Protection Enforcement, Education and Training Fund.” 
The Conference of State Bank Supervisors will receive $65 million—$15 million will establish the “State Financial Regulation Fund” and $1 million will go to each state financial regulator who signed the consent judgment. 
The state members of the executive committee who negotiated the settlement and the Ameriquest Financial Services Fund will split $10 million to cover costs and attorneys’ fees
Qualifying individuals whose homes were sold or taken in foreclosure between Jan. 1, 2008, and Dec. 31, 2011, who submit claims, will receive cash payments from the $1.5 billion set aside for that purpose.  **We heard that after the "settlement" procedure began, they experienced problems in their 3rd party reviews, and it bogged down the procedure, so then they decided it was either too much work due to the sheer numbers of applicants, or it would never get done,and they did not go over each case individually in the end.  In other words, cases which actually had merit would not get what they should have, and those that may not have had merit would get paid anyway.
Nearly $3 billion is committed to refinance “underwater” mortgages, for borrowers who are current on their payments, but whose mortgage is more than their home’s current market value. 
The remaining settlement money, approximately $17 billion, is dedicated to consumers for mortgage modifications, short sales, deficiency waivers, anti-blight prevention activities and principal forbearance for unemployed borrowers, along with specific short sale provisions for military borrowers. 
Each servicer will receive credit for completing these consumer relief activities; however since only some count dollar-for-dollar, the banks will end up providing consumer relief in excess of the nearly $17 billion specified in the consent judgment.
Approved by U.S. District Judge Rosemary Collyer on April 4, [we put the link above] the settlement is now effective. The five servicers have seven days—until April 11—to deposit their portions of the settlement into an escrow account. 
The consent judgment remains in effect for three and a half years, but the servicers are required to earn 75 percent of the consumer relief credits within the first two years or pay substantial cash penalties. Direct payments to mortgage borrowers will begin once a settlement administrator is retained, within 90 days of the settlement’s effective date.
In addition to the payments, the servicers have agreed to follow new standards for handling mortgage loans and foreclosures. During the term of the settlement agreement, the servicers will oversee and manage third-party providers, such as foreclosure firms, law firms and independent contractors. The servicers must establish an easily accessible and reliable single point of contact for each first lien mortgage borrower and develop an online site where borrowers can check the status of their loan modifications.
“Dual tracking” practices are restricted under the agreement. 
Servicers are also prohibited from adopting employee compensation arrangements that encourage foreclosure over loss mitigation alternatives. The settlement also requires more transparency in the mortgage servicing process, such as making the general requirements for short sales more available. In addition, the settlement enhances protections for military personnel.
Joseph A. Smith, Jr., former North Carolina banking commissioner, will supervise the implementation of the settlement, along with the monitoring committee comprised of representatives from the state attorneys general, state financial regulators, the U.S. Department of Justice and the U.S. Department of Housing and Urban Development. He is responsible for determining whether the five financial institutions are in compliance with the servicing standards and have satisfied the relief requirements in accordance with the consent judgment.
Although the settlement resolves some violations, the federal government and state attorneys general did not release all the potential claims against these five servicers. The federal government and states can still pursue criminal prosecutions for criminal offenses and violations of the fair lending laws based on discriminatory conduct. 
Securitization claims based on the offer, sale or purchase of mortgage securities are not released by the settlement. The states also did not release any potential claims against Mortgage Electronic Registration Systems, Inc., MERSCORP, Inc. or any tax claims relating to real estate transfer taxes. Mortgage borrowers can still file claims on an individual or class action basis.
To review the settlement documents for each servicer, go to www.NationalMortgageSettlement.com. The chart below summarizes how states allocated their share of the settlement funds.
 

State Payment Settlement Amounts


AL | AK | AZ | AR | CA | CO | CT | DE | FL | GA | HI | ID | IL | IN | IA | KS | KY | MD | MA | MI | MS | MT |NE | NV | NH | NJ | NY | NC | ND | OH | PA | RI | SC | SD | TN | TX | UT | VT | VA | WA | WI

NOTE:  If you have questions regarding an individual mortgage, please contact an attorney in your state or the Office of Mortgage Oversight. NCSL is unable to provide assistance or advice in individual cases.
 
StateDollar AllocationUse of Funds in the State
Alabama$25,305,692$1,119,730 to the Alabama Foreclosure Assistance Project administered by Legal Services Alabama to provide free civil legal representation to up to 6,000 low-income families facing foreclosure or other mortgage-related issues;
$1,095,356 to Gateway to provide financial counseling, pre- and post-purchase housing counseling, foreclosure prevention, reverse mortgage counseling, and consumer outreach;
$500,000 to the Woodlawn Foundation, Inc., for its homowner rehabilitation program to provide rehabilitation services to existing homeowners who are potentially facing foreclosure;
$500,000 to the Alabama Statewide Foreclosure Prevention Mediation Program administered by the Alabama Center for Dispute Resolution to train mediators in foreclosure mediation and provide 300-500 foreclosure mediations;
$440,000 to the Stepping In to Homeownership Project administered by the Women's Fund of Greater Birmingham to provide housing and workforce development services;
$210,870 to the Foreclosure Relief Project administered by the University of Alabama School of Law to provide free legal services through six to 10 law students each semester;
$2,530,569 to state General Fund as civil penalties, and
The remaining funds are directed to the Office of the Attorney General.
Alaska$3,286,839The funds are directed to the state General Fund to be earmarked for housing development projects.
Arizona$97,784,204$50 million to state general fund to used for areas covered by the National Mortgage Settlement, including agencies such as the state Real Estate Department, Department of Insurance and attorney general – Department of Law, and for other areas impacted by the alleged unlawful conduct of the defendants in the National Mortgage Settlement;
$41 million for direct assistance to help keep people in their homes and consumer restitution;
$5 million for enforcement and monitoring ($1.6 million per year for three years);
$5 million for housing counseling ($1.6 million per year for three years);
$4 million for legal services ($1.3 million for three years), and
$2 million for outreach, marketing and education ($666,000 per year for three years).
Arkansas$12,830,241$9 million for the Arkansas Development Finance Authority;
$2 million for the Arkansas Access to Justice Commission;
$500,000 for the University of Arkansas School of Law legal aid clinic;
$500,000 for the University of Arkansas at Little Rock School of Law legal aid clinic, and
The remaining funds are directed to the state treasury for costs and fees associated with the settlement agreement. 
California$410,576,996$1 million to the National Housing Law Project;
$225,000 to the Asian Pacific Islander Legal Outreach;

$1,750,000 to the Bet Tzedek Legal Services;
"Our more than 60 staff, including 30 attorneys, seeks innovative solutions to persistent poverty. Whether harnessing the power of technology to overcome barriers or mobilizing communities through collaborative partnerships, we seek to empower the more than 15,000 people we serve every year with the help of hundreds of pro bono attorneys and volunteers.." This is in Los Angeles...

$550,000 to the California Rural Legal Assistance;
$700,000 to the Central California Legal Services;
$450,000 to the Community Housing Development Corporation;
$500,000 to the Community Housing Works San Diego;
$75,000 to El Concilio;

$200,000 to Fair Housing of Marin; [Note by LR: You have to be a millionaire to live in Marin, they should have received very little]

$225,000 to Habitat for Humanity Stanislaus County;
$250,000 to Housing and Economic Rights Advocates;
$35,000 to the Inland Empire Latino Lawyers Association;
$850,000 to the Inland Fair Housing and Mediation Board;
$450,000 to the Legal Aid Foundation of Santa Barbara;
$725,000 to Legal Services of Northern California;

$550,000 to the Mission Economic Development Agency;
$100,000 to the National Telemarketing Victim Call Center;
$500,000 to Neighborhood Housing Services of Los Angeles County;
$345,000 to NeighborWorks Orange County;
$50,000 to the Tri-Valley Housing Opportunity Center
$575,000 to the Unity Council;
$295,000 to the Watsonville Law Center and

10% of the total payment as civil penalties and deposited in the Unfair Competition Law Fund.
Colorado$50,170,188$24 million for supplemental loan-modification programs;
$18.196 million for affordable housing programs;
$5.625 million for housing counseling through the state;
$1.5 million for Colorado Legal Services;
$750,000 for temporary staffing at the attorney general’s office;
$600,000 for the Colorado Foreclosure Hotline, and
$500,000 for marketing and outreach efforts. 
Connecticut$26,102,142$21 million to fund the Emergency Mortgage Assistance Program administered by the Connecticut Housing Finance Authority;
$400,000 for the Foreclosure Mediation Program and Voluntary Attorney Foreclosure Advice pilot program;
$500,000 for the Mortgage Crisis Job Training Program in the state Department of Labor;
$2.6 million to the state General Fund as civil penalties, and
The remaining funds will be used to fund attorneys and housing counselors in the Department of Banking, the Connecticut Fair Housing Center, the Office of the Attorney General and the Department of Economic and Community Development and to fund public service announcements promoting the Foreclosure Prevention Hotline and other related initiatives.
Delaware$7,913,923$4 million to the Delaware Emergency Mortgage Assistance Program;
$3.5 million to fund housing counselors and outreach and education programs for homeowners;
$2.75 million to the Office of the Attorney General for continuing financial fraud investigation and enforcement initiatives;
$888,923 to the Community Legal Aid Society, Delaware Volunteer Legal Services and the Legal Services Corporation to support legal representation for borrowers facing foreclosure, and
$500,000 to Delaware's Mortgage Mediation Program.
District of Columbia$4,433,081 
Florida$334,073,974$35 million for down payment assistance;
$10 million for housing counseling;
$5 million for the state court system to help with foreclosure-related issues;
$5 million to the Office of the Attorney General to fund legal aid programs;
$9,117,895 to the Florida Prepaid Tuition Scholarship Program;
$5,262,579 to the state courts system to provide technology solutions that expedite foreclosure cases through the judicial process;
$16 million to the state courts system to provide supplemental resources to reduce the backlog of pending foreclosure cases;
$9.7 million to the clerks of the court to enhance service levels to assist and support the courts in expediting processing backlogged foreclosure cases;
$10 million to the Office of the Attorney General to provide legal aid to low- and moderate-income homeowners facing foreclosure;
$10 million to the Department of Children and Families for capital improvements to certified domestic violence centers;
$20 million to Habitat for Humanity of Florida;
$50 million to reduce rents on new or existing rental units through the State Apartment Incentive Program;
$10 million to fund the construction or rehabilitation of units through the State Apartment Incentive Loan Program;
$40 million to fund the State Housing Initiative Program;
$10 million to the Department of Economic Opportunity to fund a competitive grant program to provide housing for homeless persons;
$10 million to the Department of Economic Opportunity to fund a competitive grant program to provide housing for persons with developmental disabilities;
$5 million to the Office of the Attorney General to reimburse the office for costs and fees;
The remaining funds are directed to the state General Fund as civil penalties.
Georgia$99,365,105The entire amount will be used for economic development, the money will be split equally between regional economic business assistance grants and other rural economic development efforts. 
Hawaii$7,911,883$3 million to Legal Aid and its grant partners Consumer Credit Counseling Services of Hawaii, Hale Mahaolu, The Hawaii HomeOwnership Center and Hawaiian Community Assets
$2 million to the department of Commerce and Consumer Affairs
$1,176,293 to the state judicial system
$149,225 to the Kuikahi and West Hawaii Mediation Centers
$57,122 to the Mediation Center of the Pacific
Idaho$13,305,209$500,000 to the Consumer Protection Fund;
$120,000 for the Idaho State Bar Volunteers Legal Program;
$120,000 for the Idaho Legal Aid Services;
$110,000 for distribution to other governmental entities or organizations as determined by the attorney general;
$100,000 for the Community Action Partnership, and
The remaining funds are directed to the state treasury. 


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