* Five banks settled over foreclosures in February
* Monitor says JPMorgan Chase gave $903.1 mln, BofA $889.2
By Rick Rothacker
Nov 19 Five U.S. banks have provided about $22
billion in mortgage relief to customers under a deal to settle
borrowers' accusations over foreclosures, a report by the
settlement's monitor said on Monday.
The report said that Bank of America Corp, which
owes the most, improved in providing first-lien mortgage
modifications to customers, trailing only JPMorgan Chase & Co
Bank of America provided $889.2 million in first-lien
modifications that reduced loan balances for consumers, a
turnaround from August when the bank had completed none.
JPMorgan Chase & Co's total was $903.1 million in
modifications, the most of the five banks.
Monday's report by Joseph Smith, the former North Carolina
Banking Commissioner who is serving as the settlement's monitor,
said the five banks together have provided about $22 billion in
customer relief, up from $10.6 billion in August.
The banks reached the settlement in February with state and
federal officials to resolve allegations of faulty foreclosures.
The pact requires banks to provide around $20 billion of
consumer relief by taking actions such as reducing loan balances
for struggling borrowers and refinancing loans for customers
whose homes are worth less than the value of their mortgages.
The banks, however, have not necessarily met their
obligations yet because the settlement only provides for partial
credit for certain kinds of relief. The banks only receive
credit for $0.45 of every dollar of a writedown through a short
sale, for example.
Short sales - in which borrowers sell their homes for less
than the value of the mortgage - accounted for the largest
portion of the total relief, about $13.1 billion.
Bank of America delivered $11.8 billion in total relief to
consumers, the most of any bank, with short sales accounting for
$7.4 billion of its total. JPMorgan provided the second most
relief - about $6 billion.
The other banks in the settlement are Wells Fargo & Co
($2.5 billion in total relief), Citigroup Inc
($1.1 billion) and Ally Financial Inc ($587.8 million).
"The relief the banks have reported is encouraging," Smith
said in a statement, while noting that the banks' obligations
still need to be reviewed and credited.
If a lender does not meet its required relief within three
years, it will be required to pay a penalty of no less than 125
percent of its unmet commitment, the report said.
Bank of America, which acquired troubled lender Countywide
Financial in 2008, owes the most out of five banks, about $11.8
billion in consumer relief and other payments. The bank has said
it will meet its obligations within the first year. [ID:
Counting $4.2 billion more in active trial modifications,
the five banks have provided $26.1 billion in relief through
September to 300,000 borrowers, according to the report.