Foreclosure Crisis Shows Some Signs Of Easing
Just out from Washington...
The nation's five largest banks are off to a good start on their promise to help ease the foreclosure crisis, providing nearly 140,000 struggling homeowners with a total of $10.6 billion in mortgage debt relief, according to a government report.
Housing and Urban Development Secretary Shaun Donovan said; "We will continue holding the
banks' feet to the fire in the months ahead, and we will be watching
like hawks to make sure they live up to the requirements under this
settlement."
The report from the Office of Mortgage Settlement Oversight showed that Bank of America had faltered in one key area. It did not complete a single modification of a first mortgage from the settlement's start date of March 1 through June 30.
The other four banks had completed a total of 7,093 modifications of first mortgages worth $749 million during that same period. JP Morgan Chase completed the most, 2,920, with the highest value at $367 million.
The banks have set aside about $20 billion to lower loan rates and principals and provide other relief directly to consumers, $5 billion to the states. This will be primarily for foreclosure relief and prevention programs. The banks receive credits for various types of homeowner relief. Each dollar forgiven in a short sale, for example, results in a credit of 45 cents if the bank owns the loan and 20 cents if it is held by investors.
The banks also are adopting 304 servicing standards required by the settlement, with four of the banks saying that they implemented more than half the standard as of July 5. The report did not identify those banks. Overall, Bank of America had provided the most relief to homeowners for the report period — $4.9 billion, nearly all in the form of short sales. Short sales were easier to complete in the first few months of the settlement than principal reductions. Short sales are capped however, and are not as attractive to banks because they result in less credit toward fulfilling the settlement terms.
This shows progress and things seems to be headed in the right direction. The 4th quarter of this year will definitely be watched and reported on.
The nation's five largest banks are off to a good start on their promise to help ease the foreclosure crisis, providing nearly 140,000 struggling homeowners with a total of $10.6 billion in mortgage debt relief, according to a government report.
The report from the Office of Mortgage Settlement Oversight showed that Bank of America had faltered in one key area. It did not complete a single modification of a first mortgage from the settlement's start date of March 1 through June 30.
The other four banks had completed a total of 7,093 modifications of first mortgages worth $749 million during that same period. JP Morgan Chase completed the most, 2,920, with the highest value at $367 million.
The banks have set aside about $20 billion to lower loan rates and principals and provide other relief directly to consumers, $5 billion to the states. This will be primarily for foreclosure relief and prevention programs. The banks receive credits for various types of homeowner relief. Each dollar forgiven in a short sale, for example, results in a credit of 45 cents if the bank owns the loan and 20 cents if it is held by investors.
The banks also are adopting 304 servicing standards required by the settlement, with four of the banks saying that they implemented more than half the standard as of July 5. The report did not identify those banks. Overall, Bank of America had provided the most relief to homeowners for the report period — $4.9 billion, nearly all in the form of short sales. Short sales were easier to complete in the first few months of the settlement than principal reductions. Short sales are capped however, and are not as attractive to banks because they result in less credit toward fulfilling the settlement terms.
This shows progress and things seems to be headed in the right direction. The 4th quarter of this year will definitely be watched and reported on.
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