A progress report on the national settlement with the country’s five largest mortgage companies shows almost 1200 Iowa borrowers have gotten some sort of modification in their loan.
Iowa Attorney General Tom Miller was the lead attorney in the national investigation of mortgage companies after complaints surfaced about “robo-signing” and foreclosure abuses.
“It’s beyond any expectations, both nationwide or in Iowa,” Miller says. “In the nation for consumer benefits we had estimated $34 billion. It’s at $51 billion and still counting, of course. In Iowa, we estimated around $13-14 million. It’s $39 million and still counting.”
The report covered actions during the past 15 months. The average borrower in Iowa got about $33,000 from the settlement. The principal owed on 600 Iowa mortgages was reduced.
“We had hoped that a significant number of principal reductions would be done and they have,” Miller says.
On 243 other mortgages, interest rates were reduced by an average of 3.5 percent. Other loans were modified by doing things like giving some borrowers who were unemployed, seriously ill or in some sort of financial distress a chance to pay just the interest, not the principal on their loans. The legal settlement with the mortgage companies also spells out 300 new standards for how mortgages are to be serviced, or processed.
“It’s been a real breakthrough in terms of principal reduction for going forward, both now and in future crises, so that’s a really important intangible as well,” Miller says.
In the fall of 2010 attorneys general from around the country launched an investigation of JPMorgan Chase, Bank of America, Citigroup, Wells Fargo and Ally Financial — formerly GMAC. Miller says there’s no way of knowing how many more Iowans may be eligible for mortgage relief under the settlement. To find out if you are eligible, he recommends calling the Iowa Mortgage Help Hotline at 1-877-622-4866. Find more information about the hotline here.