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According to the regulations, Caliber neither admits nor denies the attorney general’s findings. The court record adds that Caliber agreed to settle the violations “to avoid the time, expense and distraction of litigation.” Representatives for Caliber could not be reached for comment.
“Mortgage agents and investors need to know that we will always prioritize homeownership for New Yorkers over profits from predatory lenders,” James said in a statement. “This settlement shows that mortgage agents can meet their financial responsibilities without wresting homes from innocent New Yorkers. There is no need for secrecy behind loan modification programs, which have kept homeowners in check. ignoring their best options for years. Industry can – and should – adopt measures that provide sustainable and affordable modifications, as well as more transparent communications with owners. ”
The settlement with Caliber requires that all of its current New York clients with an interest-only or short-term modification be automatically assessed for the NY Principal Reduction Modification program. This change is for a monthly mortgage payment equal to their current interest payment, but would now include principal, interest, taxes and insurance. Caliber would make this change by reducing the interest rate to 3.75% for the term of the loan, extending the term to 40 years and, if applicable, deferring a portion of the principal at the end of the mortgage. . Homeowners whose homes are underwater would receive additional relief as part of the NY Principal Reduction Change, as Caliber would be required to forfeit principal balances in order for the mortgage amount to equal. at the market value of the house. Caliber estimates that this potential loan forgiveness for underwater borrowers would be valued at around $ 17 million. Each owner eligible for a NY Master Discount modification will also receive notice of the modification to which they are eligible and how to accept it, and will be encouraged to contact the Attorney General’s Homeowner Protection Program for advice. .
New York homeowners with no interest-only or short-term change will also benefit from the settlement. Caliber will need to assess New York homeowners for two additional durable and affordable modifications going forward. Both have similar terms to NY Principal Reduction Modification, but the pathways to achieve certain targets may vary:
►Modification pre-approved by NY: This change sets a target monthly payment of at least 25% lower than the current monthly payment by lowering the owner’s interest rate to 3.75% for the term of the loan, extending the term of the loan to 40 years and, if applicable, postpones part of the capital at the end of the loan term.
►Change underwritten NY: This modification, available to homeowners who submit an application, sets a monthly payment target that does not exceed 31% of the owner’s gross monthly income by lowering the interest rate to 3.75% for the term of the loan, extending the loan term of up to 40 years and, if necessary, defer part of the capital until the end of the loan term.
Going forward, Caliber will not be allowed to prioritize changes of interest only to customers in New York City who require assistance, and will only be able to offer changes of interest as a last resort. As a result of Attorney General James’ investigation, Caliber amended the offer to change letters the company sends to owners to include clear and understandable terms.
“While Caliber does not agree with some of the characteristics expressed in the New York Attorney General’s press release, we are pleased to resolve this legacy issue from 2015 on terms that provide relief to distressed customers,” said Caliber said in a statement to National Mortgage Professional magazine. “We are proud of our ability to have helped over 120,000 homeowners stay in their homes over the past 10 years. “
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