Big U.S. banks give $22 billion under mortgage relief deal

Mon Nov 19, 2012 2:57pm EST
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By Rick Rothacker

(Reuters) - 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 delivering first-lien mortgage modifications to customers, trailing only JPMorgan Chase & Co through September.

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 completed about $22 billion in customer relief, up from $10.6 billion in August.

Smith said in an interview that he was "encouraged" and that February's settlement between five banks and federal and state officials had "made significant progress." But he cautioned that no banks have met their obligations until their numbers are reviewed and credited.

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.

A coalition of national and local consumer, housing and financial reform groups, the Campaign for a Fair Settlement, said it is disappointed that the banks did not show more progress on first-lien mortgages modifications compared to August. For example, it said about 31,000 borrowers were in active trial first-lien modifications at the end of September, a slight increase from 28,047 at the time of the last report.

"There is a big gap there," said campaign representative, Dan Petegorsky.   Continued...

A member of the Poor People's Economic Human Rights Campaign take part in what they describe as a 'foreclosure takeover', at a site near where the Republican National Convention will take place in Tampa, Florida August 25, 2012. The convention starts on August 27. REUTERS/Joe Skipper