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National Mortgage Settlement outreach effort one-ups Independent Foreclosure Review

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 million homeowners.

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 distressed homeowners.

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.

Both programs have been plagued by scams and fraud from outside operations as well as lenders continuing foreclosure abuse during settlement negotiations.

Independent Foreclosure Review

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 modification benefits.

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 resources.

• 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 IFR.

• 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.

 

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