Connecticut's distressed homeowners are on track to receive significantly more mortgage relief from the $25 billion national mortgage foreclosure settlement than anticipated when it was announced last year, according to state Attorney General George Jepsen.
The latest report by the national settlement monitor shows that 5,050 Connecticut borrowers have benefitted from $345.3 million in debt relief since March 1, 2012. In the three months ended Dec. 31, 2,175 Connecticut borrowers received nearly $160.3 million in debt relief.
The $345.3 million represents the amount of debt that Connecticut borrowers will no longer have to pay back to their lenders. The average benefit was approximately $68,500.
"This is very good news for distressed homeowners, and I am pleased the loan servicers are making good on their promises to provide real relief and to help people stay in their homes," Jepsen said. "While not everyone will qualify for help, the numbers in Connecticut show a very positive trend."
Nationally, a half-million borrowers have benefited from some type of relief since last March, including more than 276,000 in the three months ended Dec. 31.
The consumer relief includes the value of first- and second-lien principal reductions; refinancing; short sales or deeds in lieu of foreclosure; deficiency waivers; forbearance for unemployed borrowers; anti-blight activities and benefits for members of the armed services.
Connecticut borrowers had been estimated to receive $155 million in relief when the settlement was announced in February 2012 with the five largest mortgage servicing companies. The settlement required the banks to provide $17 billion in debt reduction and other relief to homeowners within three years. The agreement requires 60 percent of the credited relief to provided through first- or second-lien principal reduction and $3 billion through refinancing.
Connecticut's numbers are better than anticipated because the state has been aggressive in bringing distressed homeowners and their loan providers together by hosting mortgage foreclosure assistance events around the states. The next event is planned for April 17 in New Haven.