Borrowers Receive $22 B Mortgage Relief from Five Major Banks

by San Antonio Attorney

Five major banks in the U.S. have provided approximately $22 billion of mortgage reliefs to borrowers under a settlement agreement with customers over foreclosures accusations, according to a settlement’s monitor’s report on Monday.

Based on the monitor’s report, Bank of America Corp has improved in giving first-lien mortgage adjustments to borrowers.

Bank of America has provided a total of $889.2 million in modification that resulted in the decrease of loan balances for borrowers. JPMorgan provided $903.1 million in adjustments, the biggest of the five banks.

Joseph Smith, the person in-charge of monitoring the settlement, said the mortgage reliefs provided by the five banks in September have reached approximately $22 billion, more than twice from the $10.6 billion in the previous month.

The settlement with federal and state officials over faulty foreclosures claims was reached in February. The agreement requires the banks to give customers a total of $20 billion in mortgage relief by bringing down loan balances for financially distressed customers and refinancing loans for borrowers whose mortgage balances are greater than the value of their homes.

But the banks have not yet fulfilled their obligations because the pact merely allows partial credit for some types of relief. For example, the banks just receive credit for 45 cents on the dollar of a write-down in a short sale.

Short sales – wherein homes are sold for less than the amount of the mortgage – made up the biggest part of the overall relief, approximately $13.1 billion.

Bank of America gave the most mortgage relief with a total of $11.8 billion, which is made up of short sales amounting to $7.4 billion.

The other four banks included in the settlement agreement are JP Morgan ($6 billion mortgage relief), Wells Fargo & Co ($2.5 billion mortgage relief), Citigroup Inc ($1.1 billion mortgage relief) and Ally Financial Inc ($587.8 million mortgage relief).

 

- If you are falling behind on your home mortgage payments, you may want to review your financial situation with a Real Estate Attorney. The attorney can help you review all of your options, such as mortgage foreclosure defense and debt negotiation, not only bankruptcy.

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