The nation's largest mortgage servicers have distributed $50.63 billion in direct relief to over 620,000 homeowners, or roughly $81,000 per homeowner as part of the National Mortgage Settlement, according to a progress update released today by independent settlement monitor Joseph A. Smith of the Office of Mortgage Settlement Oversight. Over one year ago, the Department of Justice, Department of Housing Urban Development (HUD) and 49 state attorneys general reached a landmark agreement with the nation's five largest mortgage servicers to address mortgage loan servicing and foreclosure abuses.
The report demonstrates significant progress on the broadest and most robust principal reduction program in the nation's history. Nearly $30 billion of the overall completed consumer relief has come in the form of principal forgiveness and refinancing. Because of the settlement, the principal reduction helps borrowers stay in their homes, lowering monthly payments on over 310,000 loans and actually reducing struggling homeowners' loan balances by more than $83,000 on average.
The following is a statement released today by HUD Secretary Shaun Donovan:
"One year in, it is clear that this historic settlement is making a profound difference on lives and communities. We have far surpassed expectations in our efforts to assist struggling Americans. Due to the efforts by 49 bipartisan state attorneys general and the federal government, hundreds of thousands of people are able to stay in their homes or avoid foreclosure, preventing the erosion of the social fabric of our communities. As a result of the settlement, over 620,000 homeowners have received on average more than $81,000 in benefits thus far.
The Monitor's latest update reaffirms a simple truth: that large-scale principal reduction is an important tool in preventing foreclosures. We look forward to reviewing the Monitor's compliance reports next month. We will also continue to keep a close eye on the banks to ensure they live up to their end of the deal when completing their consumer relief requirements and their progress on implementing new and improved servicing standards. We will not stop until homeowners get a fair shake."