Caliber Home Loans settlement will grant New Yorkers $ 17 million loan forgiveness
new York Attorney General Letitia James announced Tuesday that Caliber home loans offers up to $ 17 million in mortgage cancellations to current customers in New York City.
This regulation is for Caliber Customers that have been subject to interest-only loan modifications by the company, and will also benefit customers who continue to face the economic impact of COVID-19.
“As COVID-19 continues to hurt our state’s economy, mortgage agents and investors alike need to know that we will always prioritize homeownership for New Yorkers over profits for them. predatory lenders, “Attorney General James said in a statement.
Through this settlement, Caliber will make a change by reducing interest rates to 3.75% for the term of the loan and extending the term to 40 years, or by deferring part of the principal until the end of the loan. mortgage.
“This settlement shows that mortgage agents can meet their financial responsibilities without wresting homes from innocent New Yorkers, and that there is no need for secrecy behind loan modification programs, which have homeowners in the dark about their best options for years, “James continued. “Industry can – and should – adopt measures that provide sustainable and affordable modifications, as well as more transparent communications with owners.”
Caliber has managed thousands of mortgages that Lone Star Fund, its owner, bought at a reduced price from several GSEs. This includes Fannie Mae, Freddie mac, and the US Department of Housing and Urban Development.
Instead of providing changes, a statement by the New York Attorney General alleges that Caliber prioritized interest-only, short-term changes that reverted to much higher payments after a period of up to five years, creating a risk of default for owners.
“This settlement requires all of its current New York customers with an interest-only or short-term change to be automatically assessed for the ‘NY Master Reduction Change’,” the statement said.
Caliber has amended the offer to change letters the company sends to owners to include clear and understandable terms. Caliber will also be required to provide New York State housing counselors and legal service providers with a detailed description of the various mortgage modification programs available to New York homeowners, broken down by loan owners.