Written by Charleston Foreclosure Defense Lawyer, Graves H. Wilson, Jr.
There is nothing light or humorous about the mortgage foreclosure fiasco or the so called “National Mortgage Settlement.” The settlement documents have now been published. And it’s another sad story.
Fifty states and the District of Columbia took part in the settlement process. Forty-nine states and the District of Columbia resolved their issues in the National Mortgage Settlement (“NMS”). Oklahoma reached its own separate settlement agreement, which I have not seen, nor will I discuss.
Five banks took part in the NMS, Ally/GMAC (“Ally”), Bank of America (“BofA”), Citi, J. P. Morgan Chase (“JPM”), and Wells Fargo (“WF”).
News reports of the total settlement amount differ with some saying $25 billion and some saying $26 billion. I tried totaling the amounts in the five separate Settlement Agreements and came up with $31+ billion. Whatever.
USA Today published a breakdown of each participating State’s and the District of Columbia’s share of the $25 billion mortgage settlement on March 12, 2012. The following table, as it appeared in USA Today shows the respective shares (amounts in millions):
| Alaska |
$3.30 |
Kentucky |
$19.2 |
New York |
$107.6 |
|
| Alabama |
$25.3 |
Louisiana |
$21.7 |
Ohio |
$92.80 |
|
| Arkansas |
$12.80 |
Massachusetts |
$44.5 |
Oregon |
$29.3 |
|
| Arizona |
$97.80 |
Maryland |
$59.7 |
Pennsylvania |
$66.5 |
|
| California |
$410.60 |
Maine |
$6.90 |
Rhode Island |
$8.5 |
|
| Colorado |
$50.20 |
Michigan |
$97.2 |
S. Carolina |
$31.3 |
|
| Connecticut |
$26.1 |
Minnesota |
$41.5 |
South Dakota |
$2.9 |
|
| D.C. |
$4.40 |
Missouri |
$39.6 |
Tennessee |
$41.2 |
|
| Delaware |
$7.90 |
Mississippi |
$13.6 |
Texas |
$134.60 |
|
| Florida |
$334.10 |
Montana |
$4.9 |
Utah |
$21.90 |
|
| Georgia |
$99.40 |
North Carolina |
$60.9 |
Virginia |
$66.5 |
|
| Hawaii |
$7.90 |
North Dakota |
$1.9 |
Vermont |
$2.6 |
|
| Iowa |
$14.70 |
Nebraska |
$8.4 |
Washington |
$54.2 |
|
| Idaho |
$13.30 |
N. Hampshire |
$9.6 |
Wisconsin |
$30.2 |
|
| Illinois |
$105.80 |
New Jersey |
$72.1 |
West Virginia |
$5.7 |
|
| Indiana |
$43.80 |
New Mexico |
$11.2 |
Wyoming |
$2.6 |
|
| Kansas |
$13.80 |
Nevada |
$57.4 |
|||
Not surprisingly, California and Florida are getting the lion’s share, with almost three quarters of a billion dollars combined. South Carolina’s share of just over $31 million puts it close to the middle compared to other so-called southern states.
Where are these monies coming from? Each bank is paying an agreed upon amount into several pools. According to my reading of the Settlement Agreements, Ally will pay a total of around $1.8 billion, BofA will pay $12.5 billion, Citi will pay $3.7 billion, JPM will pay $6.8 billion, and WF will pay $6.8 billion. That comes to $31.6 billion, but who’s counting? Maybe you can get $25 billion out of it.
Under the deal:
- $17 billion will go toward reducing the principal for struggling homeowners who owe on their mortgages.
- $5 billion will be placed in a reserve account for various state and federal programs; a portion of that money will cover the $1,800 checks sent to those homeowners affected by the deceptive practices.
- About $3 billion will help homeowners refinance at 5.25 percent.
With respect to the State of South Carolina’s payment, the payment will be used by the South Carolina Attorney General for a consumer protection enforcement fund, consumer education fund, consumer litigation fund, local consumer aid fund, or revolving fund; for consumer restitution, including the administrative costs thereof; for attorneys’ fees and other costs of investigation and litigation; for reimbursement of state agencies; or for any other uses not prohibited by law. The South Carolina Attorney General shall have sole discretion over the distribution of the funds. And so far it appears that South Carolina’s share of the settlement will simply be dumped into the state’s general fund, rather than be spent on helping homeowners in need.
Some things never change. The lesson from all this is that the National Mortgage Settlement won’t do much–if anything–to help South Carolina homeowners.
