Bank of America quick to comply with mortgage settlement
When the top five mortgage originators and servicers agreed to the landmark $25 billion settlement in February, they were required to report on the progress toward fulfilling the terms of the deal at regular intervals. All have filed their first annual reports, with Bank of America winning praise for its aggressive compliance steps.
As one analyst notes, "By February 2013, Bank of America will have spent $15.8 billion as part of the settlement.The bulk of the relief, around $7.4 billion, will come from short sales or deeds-in-lieu of foreclosure…The remaining balance of the settlement will comes from various sources including: $4.75 billion in principal reductions for 30,000 borrowers, modification or elimination of $2.5 billion in home equity loans or lines of credit for 45,000 borrowers, $617 million in relocation assistance, and $250 million in interest rate reductions. For the $4.75 billion in principal reductions, the average writedown was $150,000, which would drastically help any homeowner facing foreclosure."
It looks now as if Bank of America will fulfill its financial obligation in just one year, even thought it was given three years by the settlement. Banks get more credit (determined by formula) toward their obligation if the relief is given in the first year. Other banks may be leaving much on the table by not moving as quickly.
- here's an article from SFGate