Mortgage settlement has provided New Yorkers with $625M in relief, Schneiderman says

November 19, 2012 11:30AM

The $26 billion mortgage settlement, reached in February between numerous state attorneys general and the country’s five largest mortgage servicers, has already sent about $625 million to residents of New York state, a report from New York State Attorney General Eric Schneiderman’s office shows.

Thus far under the settlement, 7,223 homeowners have received assistance, the statement says, with each borrower receiving an average of $86,600, which includes principal write-downs and “other relief” — referring to legal assistance and counseling on foreclosure prevention. 

“While there are still too many homeowners who are at-risk of foreclosure, today’s report is encouraging and reflects significant progress,” Schneiderman said today in the statement. “Thousands of New Yorkers are receiving relief from their mortgage servicers as a result of this settlement, but we must remain vigilant to ensure all eligible New Yorkers are getting the help they deserve and that the banks are being held accountable under the terms of the agreement.”

The settlement has drawn criticism over the fact that mortgages not serviced by the five major providers (Ally Financial/GMAC Mortgage, Bank of America, Citigroup, JPMorgan Chase and Wells Fargo) are not covered, and because some have argued that principal reductions for distressed borrowers unfairly enrich those who may have acted recklessly. The settlement also does not cover second mortgages; many distressed American borrowers hold multiple mortgages. –Guelda Voien