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AG Kilmartin Reports National Mortgage Settlement Consumer Relief Data

Attorney General Peter F. Kilmartin today reported on the progress made by the nation's five largest mortgage service providers to assist Rhode Island homeowners under the National Mortgage Settlement. According to data provided by the five banks that are parties to the Settlement, through March 31, 2013, approximately 2,064 homeowners in Rhode Island have received relief in the form of first and second lien modification forgiveness, short sales, principal refinancing and other forgiveness programs, with an aggregate amount of relief/benefit or $150 million, or $72,708 average benefit per homeowner.

The report also shows that there are approximately 1,000 additional homeowners who are currently in the approval and/or trial phase of first lien modification relief programs.

According to the reports filed with Joseph A. Smith, Jr., Monitor of the National Mortgage Settlement, nationally 621,712 borrowers benefited from some type of consumer relief totaling $50.63 billion, which, on average, represents about $81,437 per borrower. This figure includes both completed Consumer Relief and active first lien trial modifications.

In June the Monitor also plans to submit his first required reports to the Court concerning his review of the banks' compliance with the Settlement's servicing standards. The Monitor is also developing one or more discretionary metrics, or tests, to better measure the banks' performance on certain servicing standards. These new metrics are expected to be announced and implemented later this summer.

This information is self-reported by the banks and will not be credited under the Settlement until each bank requests a review from the Monitor; to date, only the ResCap parties (formerly GMAC) have received credit.

"While this report shows real relief for many homeowners in Rhode Island and recent data show some recovery, the housing market continues to be very fragile, heavily reliant on the state's overall economy and employment levels," said Attorney General Kilmartin. According to the most recent HousingWorks RI's analysis of Warren Group Data, 1,617 residential foreclosure deeds were filed in Rhode Island during 2012, representing a 23 percent decline from the previous year, and 43 percent decline from 2009.

"Based on calls from frustrated homeowners, I know there are areas in which some of the banks still have work to do to be in compliance with the servicing standards outline in the Settlement. My office continues to report these issues to the Monitor, and I will continue to hold the banks accountable and ensure they are in full compliance with the terms of the settlement," said Attorney General Kilmartin. "I continue to believe there is no one answer to righting the housing market. Just as it took a series of changes in financial regulations over many years to bring the market to its knees, it will take time and a series of reforms to bring it back from the brink."

Attorney General Kilmartin has proposed legislation to bring more relief to Rhode Island homeowners through a foreclosure conciliation program and statutory changes to the Mortgage Electronic Registration Systems, Inc. in Rhode Island. H5335/S0416 would require a mortgage servicer to participate, in good faith, in a conciliation conference prior to initiating foreclosure proceedings against a homeowner.

H5512/S0547 would end the practice of having the vast majority of mortgages held in the name of a private registry with no interest in the loans known as Mortgage Electronic Registration Systems, Inc., or "MERS," and require that all transfers of a mortgage interest on residential property be recorded to provide a clean chain of title. The legislation would make it easier for borrowers and regulators to determine who owns loans secured by mortgages on Rhode Island property. Borrowers facing foreclosure will be able to more easily discover who owns their loans before it is too late, and municipalities will be able to identify lenders who are responsible for abandoned homes.

Related links

Department or agency: Department of the Attorney General

Online: http://www.riag.ri.gov/

Release date: 05-21-2013

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