About the Servicing Settlements
Origins of the National Mortgage Settlement
On February 9, 2012, the attorneys general of 49 states and the District of Columbia (every state but Oklahoma), the federal government and five banks and mortgage servicers (Bank of America, Citi, JPMorgan Chase, the ResCap Parties, and Wells Fargo) reached agreement on the National Mortgage Settlement (NMS) that created new servicing standards, provided for relief to distressed homeowners, and provided funding for state and federal governments. The NMS was made formal and binding on April 5, 2012, after the United States District Court of the District of Columbia entered the consent judgments containing the Settlement terms.
The NMS established first-ever nationwide reforms to mortgage servicing. These standards require better communication with borrowers, a single point of contact, adequate staffing levels and training, and appropriate standards for executing documents in foreclosure cases. The servicers’ performance in meeting the standards was tested through a series of metrics by a court-appointed monitor, Joseph A. Smith, Jr. The NMS created 29 original metrics, and the monitor established four more in 2013 for a total of 33 metrics. Compliance reports for each servicer were filed with the court during the monitoring period, which concluded in March 2016.
The five servicers were also required to provide $20 billion in consumer relief and $5 billion in other payments. The money in the NMS was distributed in several ways. More information about this distribution and other aspects of the settlement can be found in the collection of publications of the Office of Mortgage Settlement Oversight, which include reports for both specialists and members of the public at large.
In February 2014, Ocwen entered into a new consent judgment with the Consumer Financial Protection Bureau (CFPB) and 49 states requiring Ocwen to provide $2.1 billion in consumer relief and to comply with the NMS servicing standards for its entire loan portfolio.
SunTrust entered into a new consent judgement in September 2014. This agreement with the CFPB and 49 states requires SunTrust to provide $500 million in consumer relief and to comply with the NMS servicing standards.
CFPB and 49 states also entered into a new consent judgement with HSBC in February 2016. This agreement will require HSBC to provide $370 million in consumer relief and to comply with the NMS servicing standards.
You can read more about Mr. Smith's experience as settlement monitor in "A Review and Assessment of the National Mortgage Settlement by Its Monitor,", an article published in Volume 21 of the North Carolina Banking Institute Journal.
In This Collection
This section of the National Mortgage Settlements Digital Archive contains documents related to the settlements reached between government entities and the mortgage servicers, as well as the public reporting of the Office of Mortgage Settlement Oversight and settlement monitor Joseph A. Smith, Jr.