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.
|Area||Benefits paid||Borrowers helped to date||Average Amount of Relief|
|District of Columbia||$26.2 million||348||$75,298|
|New Jersey||$599.6 million||7,841||$76,473|
|New York||$625.5 million||7,223||$86,600|
|Rhode Island||$73.2 million||1,099||$71,801|
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