Bank of America has continued its progress towards fulfilling its $7 billion consumer relief obligations under the bank's Aug. 20, 2014, settlement agreement with the U.S. Department of Justice (DOJ) and six states, Eric D. Green, independent Monitor of the agreement, reported.
In the second of his required reports under the agreement, Professor Green said that he conditionally approved credit totaling$1,181,390,703 for the first quarter of 2015. Together with the $8,948,684 worth of credit described in the Monitor's initial report, dated Feb. 17, 2015, Bank of America, subject to a final review, has earned a cumulative credit total of $1,190,339,386, or 17 percent of the $7 billion in consumer relief that it is required to provide by a deadline of Aug. 31, 2018.
Most of the credit earned in the first quarter ($1,083,041,567) is based on 2,938 first lien principal forgiveness loan modifications. The loan modifications—including forgiveness of principal, reduction of interest rates and bringing delinquent loans current without penalty—are meant to help struggling homeowners by making their mortgages more affordable.
►The average monthly mortgage payment has been reduced by about 38 percent, from $1,666 to $1,030.
►The average pre-modification interest rate of 5.50 percent has been cut to 2.18 percent.
►Prior to these modifications, 93 percent of the homeowners receiving this relief owed more than their homes were worth and were "underwater." The reduction in loan principal has reduced that to less than two percent of the homeowners being under water.
►Fifty-six percent of the modification credit during the period is for modification of loans located in federally-designated Hardest Hit Areas.
►The loan modifications are spread across 47 states and the District of Columbia, with approximately 27 percent of the modification credit located in the six states that participated in the settlement.
►Before modification, the loans had an average unpaid balance (excluding unpaid fees and interest) of $216,527. The average principal forgiven on these loans (including unpaid fees and interest) is more than $140,000.
"This kind of modification can make a critical difference in the lives of affected homeowners struggling to stay in homes burdened by loans made during the height of the property bubble and devastated by the financial crisis," Professor Green said.
The Monitor reported that the credit earned in the first quarter also includes $76,029,375 of credit for loans financing 11 rental housing developments that will provide more than 1,000 affordable housing units. Nine of the eleven developments receiving these funds meet the definition of "Critical Need Family Housing."
Additionally, $22,319,760 of the first quarter credit is for donations by the bank to Community Development Financial Institutions, land banks and nonprofits, HUD-approved housing counseling agencies, and state-based organizations providing legal assistance for foreclosure prevention or community redevelopment.
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 block level—consistent with privacy concerns.