Immediate aid to homeowners needing loan modifications now, including first and second lien principal reduction. Since March 2012, the servicers have provided $1.8 billion in principal reduction and other forms of loan modification relief for borrowers in New York State. Chase and Citi have agreed to contact borrowers in New York State who are eligible for modifications.
Immediate aid to borrowers who are current, but whose mortgages currently exceed their home’s value. Borrowers will be able to refinance at today’s historically low interest rates. Servicers have provided $1.2 billion in refinancing relief for eligible New Yorkers.
Immediate payments to borrowers who lost their homes to foreclosure with no requirement to prove financial harm and without having to release private claims against the servicers. This piece of the settlement is not intended to serve as compensation for lost homes. That’s why we preserved the ability of homeowners who were defrauded in the foreclosure process to sue. No individual foreclosure victim has to give up any claims in exchange for this money. An estimated $13 million will be distributed in New York State, and an estimated 6,400 victims in New York may qualify to receive compensation.
Immediate payments to signing states, including more than $130 million for New York State, which can be used to help fund legal services and housing counseling for homeowners who are facing foreclosure, or servicer abuse. State law provides strong protections for New York homeowners, including mandatory settlement conferences to try to avoid foreclosure, but in recent years about half of the New York homeowners navigating this process have had to do so without a lawyer. These funds will help ensure that every New York homeowner facing foreclosure will be represented by an attorney.
For more information on the funding of legal services from the national settlement, click here.
First ever nationwide reforms to mortgage servicing standards, something that no other federal or state agency has been able to achieve. These servicing standards require single point of contact, adequate staffing levels and training, better communication with borrowers, and appropriate standards for executing documents in foreclosure cases, ending improper fees, and ending dual-track foreclosures for many loans.
State oversight of national banks for the first time. Something no court could award. National banks will be required to regularly report compliance with the settlement to an independent, outside monitor that reports to state Attorneys General. And servicers will have to pay heavy penalties for non-compliance with the settlement, including missed deadlines.