Alert September 05, 2012

Progress Report on National Mortgage Settlement Released

The monitor for the national mortgage settlement has issued his first progress report on the parties’ efforts to implement the terms of the consent judgments giving rise to the settlement. The consent judgments settled claims of alleged improper mortgage servicing practices by five major mortgage servicing organizations. The settlement establishes a series of approved mortgage servicing practices, referred to as “Mortgage Servicing Standards,” and provides for “consumer relief” in the form of specific dollar amounts devoted to loan modifications, facilitation of short sales, forbearance, and refinancing programs, among other remedies. This first progress report, which was not required by the terms of the settlement, focuses on the structure and controls in place to monitor the settlement; for example, the creation of the Office of Mortgage Settlement Oversight and the anticipated allocation of settlement funds to the various forms of servicer relief. The first official monitor’s report required by the terms of the settlement will be submitted to the District Court for the District of Columbia in the second quarter of 2013.