Nov 14 About $15.8 billion in mortgage relief is
making its way to 164,000 Bank of America Corp customers
under a landmark settlement with state and federal officials,
the bank said on Wednesday.
Bank of America, which acquired troubled lender Countywide
Financial in 2008, owes the most out of five banks that agreed
in February to a $25 billion deal to help struggling borrowers
to settle accusations they pursued faulty foreclosures and
misled borrowers who sought loan modifications.
The five banks are filing quarterly reports on Wednesday to
the settlement's monitor, former North Carolina state banking
commissioner Joseph Smith, who will later file a report
compiling the data.
Smith's first report in August showed Bank of America
lagging rivals in reducing loan balances for first-lien mortgage
customers. It owes $11.8 billion in consumer relief and other
Through September, the No. 2 U.S. bank by assets said it had
approved or completed $4.75 billion in principal reduction for
first-lien mortgage customers, provided $2.5 billion in
home-equity loan relief and completed $7.4 billion in short
sales or deeds-in-lieu of foreclosure. It provided $847 million
more in relief through other programs.
Of the 30,000 homeowners who have been approved for
first-lien modifications, about 5,800 have made their required
three monthly trial payments and have converted to a completed
modification, the bank said.
The Charlotte, North Carolina-based bank showed less
progress in reducing interest rates for customers who are making
on-time payments but have little or no equity in their homes,
saying it focused first on customers more at risk of
Through September, the bank has assisted 1,000 customers
with $250 million in unpaid balances through this program, but
said it has ramped up activity in the program since then.
Banks only get partial credit for some types of relief such
as short sales, so Bank of America has not yet fulfilled its
requirements. On a conference call with reporters, Bank of
America Senior Vice President Eric Telljohann said the bank is
on track to meet the terms of the three-year agreement within
the first year.
Under the first-lien mortgage modification program,
Telljohann said about 40 percent of the loans came from the
bank's own portfolio, while the rest were owned by investors who
had given the bank permission to modify their loans.
The other banks in the settlement are JPMorgan Chase & Co
, Wells Fargo & Co, Citigroup Inc and Ally