A multibillion-dollar mortgage settlement reached in February to hold banks accountable for questionable dealings during the recession and provide relief through loan modifications and short sale assistance to homeowners is working, but still needs more time to be fully implemented, Joseph Smith, who oversees the program, said in Las Vegas on Thursday.
Smith, monitor of the Office of Mortgage Settlement Oversight, met with Nevada Attorney General Catherine Cortez Masto, housing advocates and other local officials Thursday to get perspective from the front lines of the housing crisis.
"I think there's still a sense that there's a lot of work to do," Smith said. "We've heard there's been a little progress, which is nice to know."
The mortgage settlement between five large banks, including Bank of America, Chase Bank and Wells Fargo Bank, the federal government and 49 state attorneys have begun providing billions of dollars in relief for distressed homeowners through principal reductions, short sales and forgiving second loans. In return, the federal government and states agreed to drop investigations into widespread fraud believed to be used in the foreclosure process.
Some have criticized the deal as not going far enough in holding banks financially accountable and providing too little assistance for homeowners.
So far, Nevada homeowners have received about $900 million in relief, according to a report released by the Office of Mortgage Settlement Oversight last month.
Despite the progress made so far, Smith said there's still much work to be done distributing relief to homeowners, especially when it comes to processing requests for relief in a timely manner.
"I think we've made a start, but I don't think we're close to there yet," Smith said. "There are still issues regarding the management of the relationships with distressed borrowers that need a lot of work."
Smith said one of the biggest concerns he's heard from housing counselors is getting a firm approval or rejection of their clients' applications for relief.
"One of the biggest issues we have right now is to ensure that people get an answer soon ... if the answer is no, they'd rather hear it sooner so they can make other plans," he said.
Smith praised the Nevada attorney general's handling of the mortgage settlement and the efforts made by the office to help ensure homeowners receive all the benefits they're entitled to under the settlement.
"If people in Nevada are having trouble (with the settlement) they should get help," he said. "There's an infrastructure in place to help them. They should not try to do this alone."
Smith said the settlement will take two more years to be fully implemented. He said that by then he hopes "you will see and hear less in the way of complaints about unfair treatment and that people who have home loans in distress will be fairly treated and get a reasonable remedy to their situation."
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