Of that amount, more than $1.7 billion was for modifications to 64,072 mortgage loans, making them more affordable. More than $114 million of the requested credit related to community reinvestment and neighborhood stabilization in the form of mortgages, real estate and money that the bank donated to municipalities, land banks, Community Development Financial Institutions, non-profits and other entities. Another nearly $54 million was for extending new loans to 5,336 low- and moderate-income first-time homebuyers, borrowers in Hardest Hit Areas or borrowers who lost their homes in foreclosures or short sales. (Hardest Hit Areas are census tracts identified by the U.S. Department of Housing and Urban Development as having high concentrations of distressed properties and foreclosure activities.)
Together with previous submissions, the amount of credit conditionally validated totals $6,370,587,939, or 91 percent of the $7-billion obligation. The validation is subject, at the close of the bank's consumer-relief activities, to the Monitor's final determination and certification that the bank's efforts comply with all requirements of the settlement agreement.
The $6.37 billion breaks down this way:
- Home loan modifications to increase affordability - $5.27 billion (82.8%)
- Loss-making loans to support affordable low-income rental housing - $442 million (6.9%)
- New home loans to low- and moderate-income borrowers - $346 million (5.4%)
- Donations to municipalities and non-profit organizations to promote community reinvestment and neighborhood stabilization - $308 million (4.8%)
The cumulative credit total does not yet include enhancements that the bank may be entitled to under the agreement if, at the completion of its consumer-relief activities, the bank satisfies various incentive targets that it is currently on track to hit.
"If Bank of America maintains its current pace in providing consumer relief, it will fulfill its obligations under the Settlement Agreement this year, well ahead of the four-year deadline," Professor Green said.
The consumer relief appears to be going where the settling parties intended, he added. About 53 percent of all loan modifications reviewed to date have been in Hardest Hit Areas, with a large number of them directed at loans guaranteed or insured by the VA or FHA. Loan modifications and new loans have been directed broadly, to every state and the District of Columbia, and to 107,669 census blocks. More than 5,000 affordable rental housing units – 68 percent for Critical Need Family Housing – are supported by 44 subordinated loans made at a loss to the bank.
Most importantly, according to Professor Green, the data show that modifications for first-lien principal reductions – the largest piece of intended consumer relief – are significantly reducing the financial burden on recipients. The average principal reduction on modifications reviewed to date is more than 50 percent, the average loan-to-value ratio has dropped from 176 percent to 75 percent, the average interest rate has been slashed from 5.38% to 2.10%, and, critically, the average monthly payment has been reduced by $600 a month—nearly 38 percent.
"The relief being provided under this agreement directly and materially assists homeowners struggling to afford to stay in their homes," Professor Green said.
The August 31 report and an interactive map are available at the Monitor's website at: http://bankofamerica.mortgagesettlementmonitor.com/. The website provides further details about the settlement, contact information for Bank of America, the DOJ, the attorneys general of the six participating states, HUD, Fannie Mae, Freddie Mac and the Financial Fraud Enforcement Task Force, plus information about clinics for homeowners who want assistance but do not know where to get it or cannot afford it.
The Monitor's mailing address is: Monitor of the Bank of America Mortgage Settlement, P.O. Box 10134, Dublin, OH 43017-3134, and the e-mail address is email@example.com.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/monitor-bank-of-america-closes-in-on-consumer-relief-target-300320959.html
SOURCE Bank of America Monitor, Eric D. Green