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FEATURE SERVICING Settlement by State ($ in millions) Source: SNL Financial Total STATE Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware D.C. Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming TOTAL settlement Other Relief 106.7 10 1,600 39.4 18,000 204.6 190 45 44.6 8,400 814.7 71 113.8 1,000 145 40.2 50 58.8 67.6 21 960 317.9 500 280 47.2 196 20.4 NA 1,500 43.6 837.7 91.7 136 338 NA 335 130–230 266 172 32.8 7.9 146 428 171.1 6.7 479.6 648 33.8 140 NA 25,000 29.9 1 1,300 11.8 16,600 73.3 119 NA NA 7,600 526 50.3 74.7 NA 30 5.9 NA 12 15.9 7 NA 224 NA 167 13.2 86.5 NA NA 1,300 19.4 660 63 495 179.5 NA 102 NA 93 153 NA 1.1 NA NA NA 1.6 409.9 NA 18.4 60 NA 17,000 Foreclosure & Servicing Abuse 20.6 1.7 110.4 8.5 279 32.5 11.3 NA NA 170 82.7 3.2 10 NA 26.3 7.4 NA 10.8 8.5 1.9 25.1 14.6 35 77 8.5 31 NA NA 57 4.5 12.5 4.5 13 33.6 NA 44 NA 21 3.1 1.5 NA NA NA NA 0.4 31.3 24 NA 17.2 NA 1,500 Financing Relief 29.8 4 85.8 5.7 849 46.3 36 NA NA 309 101.8 9.3 15.2 NA 43 11.6 NA 15.9 20.4 4.5 64 32.7 NA 36 11.2 38 NA NA 42 9.5 89.5 12.5 140 61.5 NA 90 NA 81 7.3 NA 2.5 NA NA NA 1.1 84.3 84 5.7 31.3 NA 3,000 Gov't 26.5 4.4 102.5 13.4 430 52.5 27 10.8 NA 350 104 8.2 13.9 NA 45 15.3 NA 20 22.8 8.2 NA 46.6 101 1 14.2 40 NA NA 60 11 75.5 12.7 NA 64 NA 97 30 69 8.9 NA 3 NA 141 23 3.6 69.7 57 NA 31.6 NA 5,000 NA – not available "Other relief" = loan mods and other direct relief "Foreclosure & servicing abuse" = payments to borrowers who suffered servicing abuse "Refi relief" = borrowers who are current but underwater All figures as of February 2012 54 | THE M REPORT amount of the settlement satisfied by innocent parties. Restitution should come from those who are settling these claims, and lien prior- ity must be respected." It remains to be seen, too, whether the homeowners who need help the most will get it. First, they have to know what they're entitled to. And though the settlement's executors swear they'll contact eligible borrowers, there's something ironic about trying to mail notices to folks who walked out (or were kicked out) of their homes: Where do you send the letter? Ethnic and racial advocacy groups like La Raza and the NAACP have put out press releases extolling the agreement as "monumental." But just as their constituencies were hit hard by unsavory lenders and servicers, The Big Picture O f course, these are all the known knowns, and the known unknowns. But a whole lot about the servicer settlement is still up in the air. While banks may have spent the past year preparing for the inevitable payout, the state attorneys general often walked in and out of negotiations, and many state governments didn't formulate systematic plans on how to distribute their windfalls. Now that the wealth is available, it's up to lawmakers how they'll spread it. And then, there's the regulatory uncertainty that's held markets in thrall since the recession started: If there's a major power shift in federal and state elections this November, who's to say today's settlement distribution programs "No compensation, no amount of money, no measure of justice is enough to make it right for a family who's had their piece of the American Dream wrongly taken from them." — President Barack Obama they can be susceptible to a host of affinity scams. Fraudsters are already trying to capitalize on the settlement. They're posing as bank officers and settlement "advisers" who promise a borrower some benefit—for an upfront fee. That's why, on the settlement website, a large red banner on the screen reads: "Help is free. Pay no one for this assistance. Report demands for payment to authorities." "Consumers should never give their bank account or credit card numbers to someone who calls them," Idaho Attorney General Lawrence Wasden warned in February. "The people and or- ganizations who are part of this settlement will never call asking for a borrower's bank account number." It remains to be seen whether poorer borrowers, who may lack access to reliable infor- mation or counseling, will see through these scams and get the help they're entitled to. will even exist in 2013? It's entirely possible that this "historic agreement to right wrongs," as HUD calls it, might end up in history's dustbin. President Obama, among others, recognizes that. "No com- pensation, no amount of money, no measure of justice is enough to make it right for a family who's had their piece of the American Dream wrongly taken from them," he said in February, when the agreement was signed. "And no action, no matter how meaningful, is going to, by itself, entirely heal the housing market. But this settlement is a start." To overcome all this uncertainty—to save homeowners, to calm investors, to keep taxpayers satisfied— Obama and his housing officials had better make this start a strong one. Remember that Joe the Plumber guy from 2008? This year, he's running for Congress. SECONDARY MARKET ANALYTICS SERVICING ORIGINATION