Five banks cut mortgage balances by $6.3 billion
Five of the biggest U.S. banks have cut struggling homeowners’ mortgage balances by $6.3 billion, part of a total $26.1 billion in home loan relief provided under a landmark federal settlement.
More than 309,000 borrowers got mortgage relief between March 1 and Sept. 30, according to a report issued Monday, Nov. 19 by those who monitors the settlement. $13.1 billion of the $26.1 billion in relief was in the form of short sales, in which lenders agree to accept less than what the seller owes Another $1.4 billion in relief was provided by refinancing 37,396 home loans with an average principal balance of $210,398.
Banks also had $4.2 billion worth of loans under trial modifications. That could lead to permanent reduction in loan balances of $135,223 per borrower. All told, banks erased about $2.6 billion in first-lien loans and $2.8 billion in second-lien loans.
The federal government and state attorneys general for 49 states forged the $25 billion settlement in February with five banks: Ally Financial Inc., Bank of America Corp., JPMorgan Chase & Co., Citigroup Inc., and Wells Fargo & Co.