The Implementation of the National Mortgage Settlement Elizabeth M. Lynch Staff Attorney MFY Legal Services, Inc. June 28, th Annual Fair Lending Conference – Fair Housing in an Era of Foreclosure and Abandonment Levin College of Urban Affairs, Cleveland State University

I. Second Mortgage Shell Game

National Relief Benefits to Date: March 1, 2012 – March 31, 2013 Type of ReliefNumber of Borrowers Served Percentage of Borrowers Number of People Receiving Relief Under NMS 607,015-- Number of People Receiving 1st Lien Modification 66, % Number of People Receiving 2nd Lien Extinguishment 196, % Number of People Receiving a Short Sale174, % Data obtained from Office of the Mortgage Settlement Oversight, available at

New York Relief Benefits to Date: March 1, 2012 – March 31, 2013 Type of ReliefNumber of Borrowers Served Percentage of Borrowers Number of People Receiving Relief Under NMS 19,601-- Number of People Receiving 1st Lien Modification 2, % Number of People Receiving 2nd Lien Extinguishment 11, % Number of People Receiving a Short Sale2, % Data obtained from Office of the Mortgage Settlement Oversight, available at

Ohio Relief Benefits to Date: March 1, 2012 – March 31, 2013 Type of ReliefNumber of Borrowers Served Percentage of Borrowers Number of People Receiving Relief Under NMS 9,593-- Number of People Receiving 1st Lien Modification % Number of People Receiving 2nd Lien Extinguishment 2, % Number of People Receiving a Short Sale1, % Data obtained from Office of the Mortgage Settlement Oversight, available at

California Relief Benefits to Date: March 1, 2012 – March 31, 2013 Type of ReliefNumber of Borrowers Served Percentage of Borrowers Number of People Receiving Relief Under NMS 177,164-- Number of People Receiving 1st Lien Modification 21, % Number of People Receiving 2nd Lien Extinguishment 49, % Number of People Receiving a Short Sale61, % Data obtained from Office of the Mortgage Settlement Oversight, available at

Florida Relief Benefits to Date: March 1, 2012 – March 31, 2013 Type of ReliefNumber of Borrowers Served Percentage of Borrowers Number of People Receiving Relief Under NMS 111,913-- Number of People Receiving 1st Lien Modification 10,4009.3% Number of People Receiving 2nd Lien Extinguishment 46, % Number of People Receiving a Short Sale30, % Data obtained from Office of the Mortgage Settlement Oversight, available at

Where’s the Relief? STATEPercentage of Homeowners Nationally That Received First Lien Permanent Modifications (As of March 31, 2013) New York4.4% Ohio1.6% California33.2% Florida15.7% First Lien Permanent Modifications Saves Homes. But Are All States Receiving A Proportional Number of First Lien Modifications?

II. Fair Housing Implications Of The National Mortgage Settlement

Credit Under the Settlement Type of LoanLoan to Value Ratio Credit for Every $1 Forgiven Portfolio Loan (loans kept on the books) </= 175%$1.00 LTV > 175%$0.50 (for only the portion of principal forgiven over 175%) Service for Others Loan (loans sold off – securitized) GSE loans do NOT participate in principal forgiveness) </= 175%$0.40 LTV > 175%$0.40 (settlement makes no distinction) First Lien Mortgage Modifications

Type of ReliefCredit for Every $1 Forgiven Second Lien Writedown Performing Second Lien (0-90 days delinquent) $0.90 Seriously Delinquent Second Lien ( days delinquent) $0.50 Non-performing Second Lien (180 or more days delinquent) $0.10 Short Sale/Deficiency Forgiveness Deficiency Forgiveness on First Lien Portfolio Loans $0.45 Deficiency Forgiveness on First Lien Portfolio Loans for Service for Others Loans $0.20 Credit Under the Settlement Second Lien Extinguishments & Short Sales

Thank You! Elizabeth M. Lynch, Staff Attorney, MFY Legal Services, Inc. (212)