How Does the National Mortgage Settlement Help Homeowners?

Back in Feb. 2012, after 16 months of investigation and negotiation, the federal government, 49 state attorneys general and the nation’s five largest mortgage services came to an agreement to address “loan servicing and foreclosure abuses, ” which was supposed to “provide immediate relief to homeowners..”

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So, after 32 months, is the $25 billion National Mortgage Settlement providing the relief that was promised? Is it easier for you to get a loan modification? After testing compliance among the five servicers, the government monitor concluded, “more work needs to be done.” So, no and in the meanwhile your life is in turmoil and you could be illegally foreclosed on!!

Here’s a list of noted settlement violations:

  • Failed to notify borrowers of missing documents within five days of receiving a loan modification application.

  • Failed to terminate force-placed insurance coverage within 15 days of receiving evidence of existing coverage.

  • Failed in providing accurate information in a letter the servicers are required to send to borrowers before initiating foreclosure.

  • Failed in adherence to timelines when deciding on modification applications, as well as notification to borrowers when requests are denied.

In addition, from October 2012 to March 2013, 59,586 complaints were collected by the monitor. Here’s a list of common complaints from consumers:

  • The single point of contact was either not provided, difficult to deal with, or difficult to reach.

  • The single point of contact was not responsive.

  • The bank failed to update the borrower’s contact information and/or account balance.

  • The bank foreclosed on them after a loss mitigation application was submitted.

  • The bank did not take appropriate action to remediate inaccuracies in the borrower’s account. The bank failed to offer a loan modification or loss mitigation opportunity.

  • The bank failed to provide a single point of contact.

People need relief, but are not getting it. The government can’t control the banks, so it’s surprising that people think they can. Free help isn’t really free when you aren’t getting results and it’s costing you more in late fees, interest and penalties.

If you’re in a situation where you are facing foreclosure, work to understand your rights. What you need is the lowest payment for the longest period of time, and it’s not always easy to find out how without the right help.

If there’s anything we can do to help clear up questions, please contact us right away.

About Brett Robbins

Brett Robbins is the founder and CEO of The Homeowner Defense Network. The HDN offers systems that help homeowners discover what programs they may or may not qualify for and why in less than a week. The HDN also has a trusted network of mortgage relief service providers, and offers a proven credit education program.

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