16,2 Million Homeowners Have Refinanced: The Administration's US Housing Market Scorecard was just released today announcing that 16.2 million homeowners have successfully refinanced since April, 2009.
Enterprise Community Partners Inc. released a study showing how the states who were parties to the landmark National Mortgage Settlement have been allocating their designated funds and analyzes whether states have adhered to the intent of the settlement.
NOTE: For more frequent updates on the topic, check out the Charfen Institute.
A Report Six Months After Finalizing The Settlement
Six months after finalizing our historic $25 billion National Mortgage Settlement, the District of Columbia and the 49 states who were parties to the settlement have been allocating and distributing their respective shares of the $2.5 billion that was designated for them, but less than half of the announced expenditures will be used as designated. Direct payments to the states were intended to help prevent foreclosures, stabilize communities, and prevent or prosecute financial fraud. To date, states have announced plans to spend $966 million for housing and foreclosure-related activities. Minneapolis metro residents are beginning to recieve notes of their mortgage settlement funds coming.
$988 Million Settlement Funds Have Been Diverted
The concerning news is that $988 million has been diverted to states’ general funds or for non-housing uses. There is $588 million remaining to be allocated. Texas and Florida own rights to the largest portion of the remaining funds with the balance to be divided out out among states that have already begun to roll out their plans.
Home Destination's owner Jenna Thuening says, "At a time that the housing recovery needs state support and trust levels need to be strengthened, the report titled 'States Fall Short on Help for Housing: Six Months after Mortgage Settlement, Less than Half of States’ $2.5 Billion Has Gone for Housing' needs a call to action. As a Minnesota resident, I am proud to see Minnesota designate over 90% of its share precisely as intended".
Minnesota's Portion of Settlement Funds
Minnesota received a total of $41,500,000 to disperse as designated in the settlement. The report says Minnesota decision making status is complete and up to 100% will go to housing. "AG’s office plans to distribute direct settlement funds to qualifying homeowners. If there is any remainder, it will go into the state general fund," the report states.
Disregard For Attorney General's Role
There seems to be some measure of disregard for the designated role of the attorneys general to negotiating the settlement. It was clear in the stipulations how states were to use their share of the funds. The report says, "Legislatures and governors have often weighed in heavily on how the funds will be spent. This has led to some very public disputes over who has the actual authority to allocate the money".
“Enterprise’s States Fall Short on Help for Housing report shines a spotlight on the fact that the majority of National Mortgage Settlement funds, particularly in some of the hardest hit states, are not going to help prevent foreclosures, stabilize communities, and prevent or prosecute financial fraud as originally intended,” said Terri Ludwig, president and CEO of Enterprise.
"Particularly in some of the hardest hit states, are not going to help prevent foreclosures, stabilize communities, and prevent or prosecute financial fraud as originally intended." ~ Terri Ludwig
According to Enterprise's findings, states correctly allocating funds (notably; Nevada, Ohio, Minnesota and Pennsylvania) are doing so in the following manner:
21 states will spend funds on housing counseling
25 states will spend funds on legal assistance to homeowners
17 states will spend funds on law enforcement or more litigation
14 states will spend funds on marketing or outreach to educate residents about foreclosure-prevention options
13 states will spend the funds on avoiding foreclosure
8 states will spend funds on affordable housing programs
8 states will spend funds on foreclosure mediation programs
With home prices rising, perhaps light lending practices with turn and favor the many Americans that are trying to refinancing their homes at low rates. Coupled with last weeks news from CoreLogic that nearly 1.3 million Americans reached “positive equity” this year, hopes are, “that will constitute a substantial stimulus to the macro-economy, worth potentially hundreds of billions of dollars,” said Jared Bernstein.
New Costs Hinder Small to Medium Banks
Getting out of the housing crisis isn't easy for small to medium banks either. A April 10th report titled "Mortgage Servicers Would Pay Up Under New CFPB Rules" from Fitch Ratings first forecasted lenders being “subjected to increased operational, compliance, and reporting expenses."
In There A Need For The Confusion Over Dispersing Funds?
The Consent Judgment, the document signed by all 49 states, the District of Columbia, the federal government, the banks, AND by the federal judge approved the settlement and is clear.
The Language In The Consent Judgements To The Five Banks Is All Similar
Bank Of America's Consent Judgment say, “To the extent practicable, such funds shall be used for purposes intended to avoid preventable foreclosures, to ameliorate the effects of the foreclosure crisis, to enhance law enforcement efforts to prevent and prosecute financial fraud, or unfair or deceptive acts or practices and to compensate the States for costs resulting from the alleged unlawful conduct of the Defendants. Such permissible purposes for allocation of the funds include, but are not limited to, supplementing the amounts paid to state homeowners under the Borrower Payment Fund, funding for housing counselors, state and local foreclosure assistance hot lines, state and local foreclosure mediation programs, legal assistance, housing remediation and anti-blight projects, funding for training and staffing of financial fraud or consumer protection enforcement efforts, and civil penalties.”
Reason To Believe More Funds Will Be Designated To Consumer Programs
To date, October 26, 2012, only about $527 million has been earmarked for new homeowner-focused programs, but citizens can expect that number to increase as many states make further decisions on their yet-to-be-designated millions. Several our larger states — in particular Florida, Illinois New York and Nevada - have rumored that they’ll be dedicating substantial amounts of the funds to consumer programs, but haven’t yet reported a final breakdown.
Both Banks And Government Failing Homeowners
Pro Pulica believes both government and banks have failed homeowners offers a fully dynamic map of the Unites States homeowners can use to gain information on their state and how National Mortgage Settlement funds are being designated. This map was originally published in May and has been updated.
Why Is This Happening?
Attorney Kevin Hanly Esq P.C. represents homeowners and other borrowers in foreclosure and certain loan re-negotiations in northern and central New Jersey counties. His answer is, "Easy. No one has the public’s back on this. Why? Because one must conclude cynically that the real purpose of the settlement was not to help the people but to help the big banks. It was the big bank’s that bought off a huge potential liability for a few pennies on the dollar. Now that the States have some of that money in their hands, who is there to protect the borrowers that need help to save their homes? You would think, their elected officials. However, it appears, that for the most part, this may not be the case".
On August 17 the mortgage bailout terms were changed by the Treasury, affecting Fannie Mae and Freddie Mac in a way that will shrink the holdings of the two mortgage giants.
Home Destination, a Minneapolis Certified Distressed Property Expert and professional Realtor with RE/MAX Results, helps homeowners determine consumer programs available that may benefit them, learn more about foreclosure help and solutions, how to request a loan modification, and to understand their local housing market. Call 612-396-7832.
Download the National Mortgage Settlement Servicing Standards Deadline
Download the National Mortgage Settlement Complaint
Download the Federal Reserve Consumers Guide to Mortgage Settlement Costs
Download the Minnesota Mortgage Foreclosure Profile.
Download the Ally GMC Settlement Document
Download the Bank Of America Settlement Document
Download the Citi Settlement Document
Download the J.P. Morgan Chase Settlement Document
Download the Wells Fargo Settlement Document
Jenna Thuening, a Twin Cities residential real estate agent offers residents news on how the national mortgage settlement funds are dispersed in Minnesota.
Eden Prairie MN 55344
Jenna's home page: homedestination.com
If I'm out in the field, you may quickly reach me by email: firstname.lastname@example.org and note how I can help you, or leave a message on my voicemail and I will return your call as quickly as possible.