Make us your home page

Big banks meet obligations of 'robo-signing' settlement, but homeowner relief falls short

Big banks are declaring victory over their obligations under the National Mortgage Settlement, but new reports show the multibillion-dollar "robo-signing" agreement has in many ways underwhelmed.

Five banks accused of mortgage sins that helped worsen the housing crisis have officially offered more than $20 billion in credited relief, satisfying the terms of their 2012 settlement, an independent monitor announced Tuesday.

But while the U.S. Department of Housing and Urban Development said in 2012 that a million homeowners would see reduced mortgage principals or refinanced loans, data show only 630,000 homeowners across the country have seen any sort of relief.

In Florida, about 120,000 homeowners were offered $9.2 billion in relief, the nation's second-highest level of assistance behind California. But much of that money went toward short sales or second-mortgage forgiveness, relief that didn't help distressed borrowers stay in their homes, reports show.

Nearly $3.5 billion, or about 38 percent of the Florida outlay, went toward clearing away second-loan debt that foreclosure-defense attorneys argue the lenders likely would have never collected.

Banks earned another $3.5 billion in credit though short sales, by approving sales of distressed homes for less than the homeowners owed. Housing counselors often call short sales a last resort: They scar homeowners' credit, force distressed owners to move and can carry large tax burdens.

Investors largely benefited from big banks' focus on short sales as relief. About 64 percent of the 4,800 Tampa Bay short sales over the last year went to all-cash buyers, the largest chunk of whom scoop up homes as investments, multiple listing service data show.

But only about 11,000 of the 120,000 Florida homeowners offered settlement aid were allowed principal forgiveness, the favored relief of housing advocates, who say reducing loan debt can best help homeowners keep making loan payments and avoid foreclosure.

The banks, including Ally, Bank of America, Chase, Citibank and Wells Fargo, provided more than $50 billion in gross relief nationwide, though overseers did not credit all of it dollar-for-dollar, settlement reports show.

Nearly $4 billion in Florida relief has been started or approved for principal-forgiveness trials, though homeowners must stay current on payments and meet other guidelines to qualify for the relief.

Attorney General Pam Bondi said Tuesday that she was pleased with banks' progress but acknowledged many homeowners remained in distress.

"I am very encouraged by what we have accomplished so far," she said in a statement, "but I realize that there are still many Floridians facing the loss of their family homes."

Contact Drew Harwell at (727) 893-8252 or

Big banks meet obligations of 'robo-signing' settlement, but homeowner relief falls short 03/18/14 [Last modified: Wednesday, March 19, 2014 7:01am]
Photo reprints | Article reprints

© 2017 Tampa Bay Times


Join the discussion: Click to view comments, add yours

  1. Last orca calf born in captivity at a SeaWorld park dies


    ORLANDO — The last killer whale born in captivity under SeaWorld's former orca-breeding program died Monday at the company's San Antonio, Texas, park, SeaWorld said.

    Thet orca Takara helps guide her newborn, Kyara, to the water's surface at SeaWorld San Antonio in San Antonio, Texas, in April. Kyara was the final killer whale born under SeaWorld's former orca-breeding program. The Orlando-based company says 3-month-old Kyara died Monday. [Chris Gotshall/SeaWorld Parks & Entertainment via AP]
  2. Miami woman, 74, admits to voter fraud. Does jail await, or will she go free?

    State Roundup

    MIAMI — An 74-year-old woman pleaded guilty Monday to filling out other people's mail-in ballots while working at Miami-Dade's elections department.

    Gladys Coego
  3. Bigger ships carry Georgia ports to record cargo volumes

    Economic Development

    SAVANNAH, Ga. — Bigger ships arriving through an expanded Panama Canal pushed cargo volumes at Georgia's seaports to record levels in fiscal 2017, the Georgia Ports Authority announced Monday.

    The Port of Savannah moved a record 3.85 million container units in fiscal 2017, the state said, benefiting from the larger ships that can now pass through an expanded Panama Canal.
  4. Dragon ride in Harry Potter section of Universal closing for new themed ride


    Universal Orlando announced Monday that it will close Dragon Challenge for a new "highly themed" Harry Potter ride to open in 2019 — sending wizard fans into a guessing game with hopes for a Floo Powder Network or the maze from the Triwizard Tournament.

    Universal Orlando announced Monday that it will close Dragon Challenge on Sept. 5 for a new "highly themed" Harry Potter ride to open in 2019. The ride, originally the Dueling Dragons roller coaster, was renamed and incorporated into the Wizarding World of Harry Potter when the hugely popular area opened in 2010.
  5. Would you let your company implant a chip in you?

    Working Life

    Would you ask an employee to get a chip implanted in her hand? Sounds invasive and intrusive. But come Aug. 1, one company in Wisconsin will be giving it a try.

    Three Square Market - a developer of software used in vending machines - is offering all of its employees the option to get a microchip implanted between the thumb and forefinger. [Photo from video]