Servicers have three years to provide relief to homeowners as outlined in the $25 billion ""national mortgage settlement"":http://nationalmortgagesettlement.com/. To raise awareness and alert homeowners of the help that is available, HUD Secretary Shaun Donovan and Iowa Attorney General Tom Miller announced a new ""settlement PSA"":http://www.youtube.com/watch?v=_wiBbSFli0I&feature=youtu.be and ""online resources"":http://portal.hud.gov/hudportal/HUD?src=/mortgageservicingsettlement through the HUD website.[IMAGE]
The online resources through HUD include fact sheets and links to additional resources.
As programs offering assistance are announced, Miller warned of scam artists and said that if someone asks for money upfront for assistance, don't do it.
""You don't have to pay a dime to participate in this. There are real criminals trying to take advantage of people,"" said Miller.
One way to access free assistance is by contacting a HUD counselor at 888-995-HOPE.
Through the $25 billion mortgage servicing settlement, $10 billion is available for principal reductions to provide relief to underwater homeowners. Also, at least $3 billion is available for refinancing underwater borrowers who are current on their mortgage.[COLUMN_BREAK]
The five servicers participating in the settlement are Bank of America, JPMorgan Chase, Wells Fargo, Citigroup, and Ally Financial. If servicers don't meet the targeted amounts of relief they are required to offer within three years, they will face financial penalties.
Fannie Mae and Freddie Mac loans are not eligible for principal reduction through the settlement due to a decision from the GSEs' regulator, Edward DeMarco.
FHFA Acting Director DeMarco ""recently reiterated his decision"":http://dsnews.comarticles/demarco-reiterates-stance-against-principal-forgiveness-program-for-gses-2012-07-31 against principal reduction for GSE loans, citing reasons such as taxpayer losses and a moral hazard issue.
Both Donovan and Miller said they believe DeMarco's decision is wrong.
""I believe, the president believes, the ""treasury secretary believes"":http://dsnews.comarticles/demarcos-opposition-stirs-up-principal-reduction-debate-2012-08-01, the decision that Ed DeMarco made is wrong. We've urged him to reconsider,"" said Donovan. ""There is clear evidence at this point that principal reductions benefit not only homeowners and neighborhoods, but would benefit the taxpayer in this case, as well the economy more broadly.""
Donovan also added that DeMarco is a career employee, and said that while some have called for him to be fired, that is not authority the president has.
""I just believe so strongly that Ed DeMarco is wrong,"" added Miller ""In the farm crises of the 1980s in Iowa, principal reduction was done and helped save the rural fabric of our state.""
Separate from the national mortgage settlement, the Fed and OCC ""announced a deadline extension"":http://dsnews.comarticles/deadline-to-request-independent-foreclosure-review-extended-again-2012-08-02 to request an ""Independent Foreclosure Review"":https://independentforeclosurereview.com/. The new deadline is December 31, 2012.