Bank of America has provided 59 percent of $7 billion in consumer relief required under the Charlotte company's record-setting 2014 mortgage settlement with the U.S. government, the accord’s independent monitor said this week.
In his latest report on the bank’s progress toward its consumer relief obligations, Eric Green said he has granted conditional approval to $4.1 billion in total aid. The figure includes $806.5 million in relief from the third quarter of last year.
If Bank of America sustains its current pace, it will meet its consumer relief requirements well ahead of August 2018 deadline set by the settlement, Green said.
The findings were disclosed in Green’s fourth report on the bank’s compliance with the $16.65 billion pact, the biggest civil settlement between a single company and the government.
Digital Access for only $0.99
For the most comprehensive local coverage, subscribe today.
In reaching the accord, Bank of America admitted it, Countrywide Financial and Merrill Lynch took part in faulty mortgage-backed securities practices. The bank bought Countrywide in 2008 and Merrill Lynch in 2009.
Of the settlement’s total, $9.65 billion was cash payments from Bank of America to the government and six states. The other $7 billion is designed to help hundreds of thousands of consumers harmed by the financial crisis, federal authorities have said.
Under the settlement, Bank of America can earn credit for various forms of relief. Those include modifying mortgages to make them more affordable, giving loans to low-income and moderate-income borrowers and donating money to housing-counseling and legal-assistance groups.
Green’s report shows the bulk of the bank’s relief has been in the form of reducing unpaid principal balances on mortgages. Of the bank’s total approved credit, roughly $2.7 billion is for principal forgiveness on 8,069 loans. The settlement requires the bank to provide at least $2.5 billion in such relief.
The next-largest portion of relief, about $502.7 million, has come from the bank wiping out portions of principal for which it had allowed borrowers to delay payments. Bank of America has provided such relief for 6,526 loans. The settlement does not set minimums for that form of aid.
In a statement, Green said the relief “appears to be reaching its targets and making a meaningful difference.”
The settlement made incentives available to Bank of America for relief provided ahead of the 2018 deadline. Extra credit was offered for aid issued last year.
Bank of America spokesman Dan Frahm said that even though the company is close to fulfilling its consumer relief obligations, “we continue working hard to ensure customers in need of assistance are treated fairly and receive timely and accurate decisions with respect to relief they are seeking.”
Relief has gone to all 50 states and the District of Columbia, including to North Carolina, which has received more than $80 million in loan modifications, according to Green’s report.