BOSTON, Feb. 29, 2016 /PRNewswire/ -- Only a year and a half into its historic mortgage settlement with the U.S. Department of Justice and the attorneys general of six states, Bank of America has fulfilled 59% of its $7 billion consumer relief obligations, Professor Eric D. Green, independent Monitor of the settlement, reported today.
Professor Green conditionally approved $806,545,816 worth of credit for consumer relief in the third quarter of 2015. In his fourth report on the Bank's progress, Professor Eric Green noted that the amount of credit conditionally approved now totals $4,144,953,001, or 59% of the required $7 billion.
"If Bank of America is able to keep this pace in providing Consumer Relief, it will fulfill its obligations under the Settlement Agreement well ahead of the four year deadline," Professor Green said.
Nearly $463 million in credit was for modifications to an additional 6,933 loans. More than $60 million in credit was for the extension of 5,303 new home loans to low and moderate-income level first-time homebuyers, borrowers in Hardest Hit Areas (a U.S. Housing and Urban Development Department designation) or borrowers who had lost their homes due to foreclosures or short sales.
More than $55 million of the credit was for 60 donations to Community Development Funds, to legal assistance organizations, and to HUD-approved Housing Counseling Agencies. More than $227 million was credit for 18 subordinated loans to facilitate affordable housing.
Professor Green said that the relief appears to be reaching its targets and making a meaningful difference:
- Principal forgiveness granted under the first-lien loan modifications – the largest category of intended consumer relief – has reduced principal 51% on average, lowered the average loan-to-value ratio to 75% from 179%, more than halved the average interest rate to 2.12% from 5.44% and cut the average monthly payment by nearly 38%.
- Of the 4,900-plus affordable rental housing units supported by the subordinated loans, 70% are for Critical Need Family Housing as defined in the Settlement Agreement.
- Approximately 56% of the loan modifications to date are in Hardest Hit Areas.
"This directly and materially assists homeowners struggling to afford to stay in their homes," Professor Green said.
The Monitor has also started to disburse the over $490 million Tax Relief Payment Amount as part of the Settlement Agreement. The funds will be paid to certain nonprofit organizations across the country and are to be used for housing counseling, neighborhood stabilization, foreclosure prevention, legal assistance, or similar programs.
Under the Settlement Agreement, the Tax Relief Payment Amount must be distributed to certain nonprofit organizations because the Mortgage Forgiveness Debt Relief Act was recently extended through the end of 2016. "Thanks to Congress and the President's extension of this tax relief to homeowners receiving modifications, these funds can now be put to use to further assist distressed communities and families in need," Professor Green said.
To help the public visualize what kinds of relief are going where, Professor Green's team of professionals developed an easy to use interactive map that allows users to point and click for details of the reported credit, including location at the national, state, county, and census tract level – consistent with privacy concerns.
The February 29 report and interactive map are available at the Monitor's website at: http://bankofamerica.mortgagesettlementmonitor.com/. The website provides further details about the settlement, plus contact information for Bank of America, the DOJ, and the attorneys general of the six participating states, HUD, Fannie Mae, Freddie Mac, the Financial Fraud Enforcement Task Force, and 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.
SOURCE Monitor of the Bank of America Mortgage Settlement