Appointed monitor explains role in National Mortgage Settlement

Lending servicing standards were established to measure lenders in the National Mortgage Settlement, according to Joseph Smith Jr., the appointed monitor of the settlement and the Office of Mortgage Settlement Oversight (OMSO).

Smith spoke at the 2013 Commonwealth Housing Forum, sponsored by the Pennsylvania Housing Finance Agency (PHFA), in Harrisburg yesterday.

He is responsible for measuring the mortgage servicers’ conduct, ensuring that the lenders are complying with the consent judgments outlined in the agreement. The banks, not the OMSO, modify and adjust mortgage terms. Smith’s job is to make sure the banks provide consumer relief and abide by the agreed-upon servicing reforms, which were fully implemented as of October 2012. The OMSO’s goal is to provide relief for current borrowers and  to help create a better mortgage system for the future.

Smith said the oversight of the mortgage lenders will be more effective with outside input. “The metrics don’t cover all the issues that could occur. We need input,” he said. “Addressing compliance issues is important to me and your experiences can help identify issues where a pattern exists.”

He urged those working with distressed homeowners who notice problems with lenders to submit a complaint online. Submitting a complaint won’t help specific clients but will help the OMSO to understand patterns of problems within the mortgage industry.

As part of the National Mortgage Settlement between 49 attorneys general offices, $25 billion was paid to the states by Bank of America, Citi, JPMorgan Chase, the ResCap Properties and Wells Fargo. Individual states varied in how they used the settlement. According to Brian Hudson, executive director of PHFA, Pennsylvania’s portion was approximately $66 million, $60 million of which has been allocated to restart the Homeowners’ Emergency Mortgage Assistance Program (HEMAP) in the Commonwealth.

Smith reflected on the first year of the settlement and working to find a balance between the five largest mortgage lenders and thousands of consumers who have lost confidence in the government to help find a solution to their mortgage problems. “Many consumers have an understandable skepticism of lending institutions; we hope we can strengthen public confidence.”