Attorney General: Connecticut Homeowners Continue To Benefit from National Mortgage Foreclosure Settlement
This news release was issued by the Attorney General's Office.
May 21, 2013
Attorney General George Jepsen said Connecticut’s distressed homeowners continue to benefit from first-lien principal reductions and other mortgage relief programs resulting from the $25 billion national mortgage foreclosure settlement announced last year.
Updated numbers provided today by the national settlement monitor show that nearly 6,000 Connecticut borrowers have received $420.1 million in debt relief since March 1, 2012. For the first quarter of 2013, 1,055 Connecticut borrowers received nearly $84 million in debt relief, with an average benefit of $79,480.
The relief represents the amount of debt that Connecticut borrowers will not have to pay back to their lenders. Nationally, more than 607,000 borrowers have benefitted from nearly $48.7 billion in mortgage relief since the program began.
“I am pleased to see that so many Connecticut residents are being helped and that much of the assistance is coming through principal reductions to first-mortgage loans,” said Attorney General Jepsen, who helped to negotiate the national settlement. “That means more people are staying in their homes, which will help Connecticut’s economy and local communities.”
“Completed first-mortgage principal forgiveness accounts for $99 million of the benefits received to date by Connecticut borrowers,” Jepsen said.
Since many more borrowers have been offered, approved or started first-lien principal reduction modifications, Connecticut numbers are expected to remain strong for the three-month period ending in June, he said.
The settlement required the nation’s five largest loan servicing companies -- Bank of America, CitiMortgage, Inc., Ally Financial, Inc., J.P. Morgan Chase Bank and Wells Fargo -- to provide $17 billion in debt reduction and other relief to their mortgage customers nationwide within three years. Connecticut borrowers had been estimated to receive $155 million in relief when the settlement was announced in February, 2012. It took effect in April of that year.
The consumer relief also includes the value of short sales or deeds in lieu of foreclosure; deficiency waivers; forbearance for unemployed borrowers; anti-blight activities; and benefits for members of the armed services.
Connecticut relief numbers may be ahead of initial estimates because the state has hosted five mortgage foreclosure assistance events around the state, bringing distressed homeowners and their loan providers together to begin the mortgage review or modification process. In addition, nonprofit housing counselors and legal aid attorneys are helping borrowers obtain relief under the settlement.
While the latest information focused on consumer relief and not on the banks’ compliance with other aspects of the settlement, the monitor will soon report on the testing he has conducted to gauge whether the servicers are complying with the settlement servicing standards. Jepsen serves on a committee of attorneys general overseeing compliance with the settlement and is working closely with the monitor.
The Attorney General encouraged all Connecticut homeowners who are having difficulties with their mortgage to call 1-877-472-8313, the state Department of Banking’s Foreclosure Assistance Hotline, to learn about state and federal resources available for help.
Assistant Attorneys General Joseph Chambers and Matthew Budzik, head of the Finance department, are working with the Attorney General on this matter.