The five banks that are part of the national mortgage settlement have now provided more than $50 billion in benefits to consumers, the agreement's watchdog announced Tuesday.
Of that total, $20 billion has come in the form of short sales, according to a report by settlement monitor Joseph A. Smith Jr. Second-lien forgiveness accounted for around $14 billion. And principal reduction on first liens totaled $10.1 billion. The remainder of the relief fell into a variety of other categories, including refinancing and donations of foreclosed properties.
Iowa Attorney General Tom Miller, who played a lead role in the multistate settlement, told reporters that the $50.6 billion total far exceeds his office's original estimate of $36 billion in consumer benefits.
"We really didn't anticipate this. It's very welcome," Miller said.
The banks that have obligations under the settlement include Bank of America, Citigroup, JPMorgan Chase and Wells Fargo. Ally Financial also signed onto the agreement, but some of its obligations have shifted to other parties as it has unwound its mortgage portfolio.
The quarterly report gave Miller and other Democratic architects of the settlement, including the U.S. Department of Housing and Urban Development, a chance to tout their achievements at a time when the banks' compliance with the deal is coming under close scrutiny.
New York Attorney General Eric Schneiderman, who signed onto the 49-state settlement last year, is now threatening to sue Wells Fargo and Bank of America for alleged violations of the agreement's mortgage servicing standards.
Schneiderman, a Democrat, is
Miller, the Iowa attorney general who serves on the monitoring committee, did not commit Tuesday to any particular course of action regarding a potential lawsuit. But there were signals during Tuesday's call with reporters that the multistate monitoring committee is not on board with the New York attorney general's combative approach.
Smith, the settlement's monitor, plans to submit his first report on the banks' compliance with the servicing standards to a judge next month. His office also stated that it is developing at least one new test to better measure the banks' performance in complying with the servicing standards.
That approach will be more effective than lawsuits that will take years, said North Carolina Attorney General Roy Cooper, a member of the settlement's monitoring committee. "We expect the banks to comply with the servicing standards, and some of them have fallen short," Cooper told reporters, though he declined to name any specific banks. "If they don't correct it, we will take action."
For his own part, Miller said the fitful progress in implementing the servicing standards was to be expected, given the dysfunctional preexisting state of the mortgage servicing business.
"Not surprisingly, there's some progress made, but there's still a lot to be done," he said. "It's like turning around an aircraft carrier that's out of control. It's difficult but possible."
Bank of America has provided consumer benefits of $27.9 billion under the settlement, or more than half the total. That prompted Miller to single out the Charlotte-based bank for praise, despite B of A's problems in New York state.
"They don't get mentioned in a positive manner too often," Miller said.
