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Thousands of Underwater Mortgages in NY Get Adjustments

rbj.netNov 19, 2012

By Will Astor

More than 7,000 New York homeowners have had underwater mortgages adjusted since state attorneys general, including New York’s Eric Schneiderman, and several major U.S. banks announced a deal last spring in which the banks agreed to provide relief to homeowners affected by the mortgage crisis, a report issued Monday by settlement monitor Joseph Smith Jr. found.

The five banks agreeing to the deal—Bank of America Corp., JPMorgan Chase & Co., Wells Fargo & Co., Citigroup Inc. and Ally Financial Inc.—among them write 60 percent of U.S. home mortgages. The settlement calls for the banks to pay out $25 billion nationally with $17 billion going directly to homeowners.

The Nov. 19 report is a preliminary update based on figures the banks submitted. Smith’s staffers will work to double check the banks’ numbers before a more formal report is turned in to a U.S. District Court in the second quarter 2013, Smith said. 

“No credit will be awarded to a servicer until I, as monitor, am satisfied that the servicer has met its obligations,” he promised.

Schneiderman arranged for $60 million of New York’s $130 million share of the national settlement amount to go to pay for legal services to help strapped homeowners deal with banks and loan servicers over the next three years.

He also serves as co-chairman of the Residential Mortgage-Backed Securities Working Group, a body convened by President Barack Obama in January to investigate the residential mortgage securitization that brought on the mortgage crisis.

Members of the working group include Department of Justice, Securities and Exchange Commission and state law enforcement officials.

Smith said institutions involved in the five-bank settlement have forgiven principal amounts of the mortgages of 967 New York borrowers with loans totaling $113.9 million. The banks also gave thousands of other homeowners a grab bag of boons, including forgiveness and reductions of second-mortgage debts, modifications to reduce total debt and letting homeowners complete short sales. New Yorkers aided by the program on average got $86,600 worth of relief, Smith found.

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CFLA was founded by the Nation's Leading Foreclosure Defense Attorneys back in 2007 to serve the Foreclosure Defense Industry and fight pervasive Bank Fraud. Since opening our virtual doors, CFLA has rapidly expanded to become the premier online legal destination for small businesses and consumers. But as the company continues to grow, we're careful to hold true to our original vision. For us, putting the law within reach of millions of people is more than just a novel idea—it's the founding principle, just ask Andrew P. Lehman, J.D.. With convenient locations in Houston and Los Angeles, you can contact Our National Account Specialist and General Manager / Member Damion W. Emholtz at 888-758-2352 for a free Mortgage Fraud Analysis or to obtain samples of work product, including cutting edge Bloomberg Securitization Audits, Litigation Support, Quiet Title Packages, and for more information about our Nationally Accredited and U.S. Department of Education Approved "Mortgage Securitization Analyst Training Certification" Classes (3 days) 24 hours for approved CLE & MCLE Credit (Now Available Online).

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