Home loan relief cuts mortgage balances by $6.3 billion
LOS ANGELES - Five of the biggest U.S. banks have cut struggling homeowners' mortgage balances by $6.3 billion, part of a total $26.1 billion in home loan relief provided under a landmark settlement over foreclosure abuses.
LOS ANGELES - Five of the biggest U.S. banks have cut struggling homeowners' mortgage balances by $6.3 billion, part of a total $26.1 billion in home loan relief provided under a landmark settlement over foreclosure abuses.
More than 309,000 borrowers received some form of mortgage relief between March 1 and Sept. 30, according to a report issued Monday by Joseph Smith, monitor of the settlement.
That translates to roughly $84,385 per homeowner, according to the report, which is based on mortgage servicers' own account of their progress as they move to comply with the settlement terms.
"The relief the banks have reported is encouraging," Smith said in a statement. He added that the banks won't get credit under the settlement until he can confirm their figures.
Smith said that $13.1 billion of the $26.1 billion in relief was in the form of short sales, in which lenders agree to accept less than what the seller owes on the mortgage.
And $1.4 billion more in relief was provided by refinancing 37,396 home loans with an average principal balance of $210,398. As a result, each borrower will save about $409 in interest payments each month, according to the report.
Banks also had $4.2 billion worth of loans under trial modifications. That could lead to permanent reduction in loan balances of $135,223 per borrower.
The federal government and state attorneys general for 49 states forged the $25 billion settlement in February with five banks: Ally Financial Inc., Bank of America Corp., JPMorgan Chase & Co., Citigroup Inc. and Wells Fargo & Co.