Colorado homeowners get $207 million in bank settlement

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Colorado Attorney General John Suthers

A total of 3,698 homeowners in Colorado so far have received $207.4 million in mortgage relief from a fraud settlement with five major banks, a national report released today shows.

The report by an independent monitor for the National Mortgage Settlement Administrator calculated  relief, such as principal reduction on mortgages and lower interest rates on loans, from Ally, Bank of America, Citibank, JPMorgan Chase and Wells Fargo. Available forms of relief include: payments to borrowers who were wrongly foreclosed upon; reduction of unpaid principal balances; refinancing for borrowers whose homes are worth less than the money they owe; and the opportunity for short sales and other relocation assistance.

Bank of America, in Colorado, for example, completed 966 short sales and forgave the deficiencies on the loans. A short sale is when a home is sold for less than the mortgage amount.

“Today’s release of the first official report from the settlement’s Independent Monitor indicates that families and struggling homeowners benefit when we work in a bipartisan way,” said Colorado Attorney General John Suthers. “The report demonstrates significant progress on the broadest and most robust principal reduction program in the nation’s history.”

An analysis of the report by InsideRealEstateNews.com, shows that a Colorado homeowner on average received $56,070 in relief, almost 29 percent lower than the $78,730 average settlement per borrower in the U.S.

The report shows that so far 278,419 borrowers have received $21.9 billion relief from the banks, while a press release released from the National Mortgage Settlement Administrator said about 310,000 borrowers have received $26.1 billion, or about $84,000 per borrower.  The discrepancy between the report itself and the release wasn’t immediately apparent. The National Mortgage Settlement has did not immediately return a call to InsideRealEstateNews.com.

You are correct that our average relief is lower,” said Carolyn A. Tyler, a spokeswoman for the Colorado Attorney General’s Office. “The reason for this is that there is less negative equity in Colorado than there is in the other states. Therefore, the loan write-downs in those other states knocks off more principal in order to get down to the 120 percent loan-to-value required by the settlement. In order to get credit for a principal reduction modification the loan’s loan-to-value  must be reduced to 120 percent They don’t have to go as far in Colorado to get there as they do in other states with higher LTVs.”

Negative equity is when a homeowner owes more than the mortgage amount.

In Colorado, the mortgage relief provided by the five banks includes:

  • Bank of America, $112 million for 1,912 borrowers, for an average of $58,600 per borrower.
  • JPMorgan Chase, $42.5 million for 665 borrowers, for an average of $63,888 per borrower.
  • Wells Fargo, $27 million for 596 borrowers, for an average of $45,290 per borrower.
  • Ally, $14 million for 242 borrowers, for an average of $57,897 per borrower.
  • Citibank, $11.8 million for 283 borrowers, for an average of $41.856 per borrower.
Overall, Colorado ranked 19th for the amount of mortgage relief per borrower.  Colorado’s share of the settlement equates to 0.94 percent of the amount distributed so far and the number of 1.3 percent of the number of homeowners in the program.
In addition to those who have already been helped, there are 494 borrowers who have been approved to be in the trial part of the loan-modication program who could receive $37.8 million in relief, which equate to $76,644 per borrower and another 401 borrowers in the trial modification program eligible for $29.4 million, or $73,213 per borrower.
California homeowners have received the largest chunk of the settlement — $6.9 billion for 80,079 homeowners, which equates to $111,581 per borrower. Nevada was No. 2, receiving more than $900 million, about $100,000 per borrower.
Following is a list of the top states, based on the average amount of relief per borrower.
AreaBenefits paid Borrowers helped to dateAverage Amount of Relief
U.S.$21.9 billion278,416$78,730
Alaska$5.2 million 88$59,387
Arizona$985 million13,011$75,702
California$8.9 billion80,079$111,581
COLORADO$207.4 million3,698$56,076
Connecticut$184.6 million2,861$64,536
District of Columbia$26.2 million348$75,298
Florida$3.6 billion46,998$73,663
Hawaii$94.2 million949$99,226
Idaho$96.4 million1,653$58,321
Illinois$779.7 million11,273$69,168
Maryland$552.7 million6,933$79,721
Massachusetts$266.4 million3,949$67,457
Nevada$907.9 million9,071$100,089
New Jersey$599.6 million7,841$76,473
New York$625.5 million7,223$86,600
Oregon$199.8 million3,134s63,745
Rhode Island$73.2 million1,099$71,801
Utah$152.9 million2,491$61,418
Virginia$401.8 million5,721$70,242
 

Source: Independent monitor for the National Mortgage Settlement Administrator.

Have a story idea or real estate tip? Contact John Rebchook at JRCHOOK@gmail.com. InsideRealEstateNews.com is sponsored by Universal Lending, Land Title Guarantee and 8z Real Estate. To read more articles by John Rebchook, subscribe to the Colorado Real Estate Journal

 

 

 

 

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John Rebchook

John Rebchook has more than 30 years of experience in writing and communications. As the Real Estate Editor for the Rocky Mountain News, he wrote about residential and commercial real estate for 26 years. He has won numerous awards for business stories and columns that he wrote, both as an individual and part of teams. In addition to real estate, he also covered economic development, banking and financing, the airlines, and cable TV for the Rocky. In addition, he was one of the original freelance writers for GlobeSt.com, covering commercial real estate for the Internet publication.

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