National Mortgage Settlement outreach effort one-ups Independent Foreclosure
by Broderick Perkins
(8/6/2012) - Offering a better-late-than-never marketing campaign,
federal and state officials recently rolled out a pumped up outreach effort
to help consumers connect with the benefits available under the $25-billion
National Mortgage Settlement (NMS).
Originally announced back in February 2012 the settlement with Bank of America, JP Morgan Chase,
Citigroup, Ally Financial and Wells Fargo comes with $17 billion in mortgage
relief, including principal reductions of up to $20,000 to more than 1
NMS is restitution for a corporate culture of foreclosure abuse from
"robo-signed" (forged or falsified) affidavits in foreclosure proceedings to
"dual tracking" (simultaneously working a modification application and a
foreclosure procedure on a mortgage) that cost homeowners their homes, cash
and emotional distress.
U.S. Department of Housing and Urban Development (HUD) Secretary Shaun
Donovan and Iowa Attorney General Tom Miller recently unveiled new efforts
to promote the settlement. The efforts include a straight-forward video,
online information and a detailed brochure pointing housing consumers to the
national settlement as well as a host of other government programs for
Under fire for not doing likewise, the Independent Foreclosure Review (IFR) has suffered a lack
of participation. It recently extended until Dec. 31, 2012 the deadline for
foreclosed homeowners to file a claim. It's the program's third extension since it was announced in April 2011.
Under the IFR settlement, 14 large mortgage servicers were to retain
independent consultants to conduct a comprehensive review of foreclosure
activity in 2009 and 2010 to identify borrowers who may have been
financially injured due to errors, misrepresentations, or other deficiencies
in the foreclosure process.
If a review discovers financial injury, remediation can include lump-sum
payments ranging from $500 to $125,000, suspension or rescission of a
foreclosure in process, a loan modification or other loss mitigation
assistance, correction of credit reports, or correction of deficiency
amounts and records.
National Mortgage Settlement
NMS addresses similar concerns, but also fined mortgage servicers more
than $766 million, makes foreclosures a solution of last resort and includes
regulations that force mortgage servicers to evaluate homeowners for other
loss mitigation options before proceeding with a foreclosure.
The settlement applies only to privately held mortgages written between
2008 and 2011, exempting Fannie Mae- and Freddie Mac-insured loans and comes
with principal reductions averaging $20,000, checks of up to $1,800 for
homeowners who lost their homes to foreclosure, and refinancing and mortgage
With the agreement, NMS launched a web site
detailing the settlement, directing consumers to benefits, warning against
fraud and supplying other information.
New NMS outreach materials
Recently, it pumped up its outreach campaign with three additional
Video - A public service announcement announces NMS and
advises consumers to contact their lender, state attorney general and or the
Homeowner HOPE hotline to determine if they are eligible for benefits.
Online - HUD's new "Homeowner Help" web page is a compendium of mortgage
relief information for civilians and military personnel and veterans,
including the NMS, a comprehensive list of foreclosure avoidance programs,
government relief programs, housing counseling referrals, scam avoidance
techniques and a lot more. It would be a one-stop shop for all things
related to mortgage distress if it also included at least a pointer to
Brochure - HUD's two-page "Mortgage Assistance Guide" comes with a welcomed
easy-to-digest clarity championed by the Consumer Financial Protection
Bureau. Based upon your financial stress or need (lost job, underwater
status, mortgage payment affordability, need to refinance) the brochure
points consumers to the programs most likely to help you. It also distills
information from the "Homeowner Help" website in a handy brochure.