This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Banks Credited With $15.3B in Mortgage Relief Under National Settlement

NEW YORK ( TheStreet) -- The big four banks have made "significant progress" toward meeting their obligations under the $25 billion mortgage settlement reached in 2012 over foreclosure abuses, according to settlement monitor Joseph Smith.

In his interim report, the monitor credited Bank of America (BAC - Get Report), Citigroup (C - Get Report), JPMorgan Chase (JPM - Get Report) and Wells Fargo (WFC - Get Report) for providing $15.3 billion in refinancing and consumer relief as of Dec. 31, 2012.

Note that the amount credited by the monitor is much smaller than the actual relief in gross dollar terms. Under the national mortgage settlement, the banks do not receive a dollar-for-dollar credit for most of the relief provided. They receive only partial credit for relief measures such as short sales or for modifying loans owned by investors for instance.

The gross consumer relief provided by the four banks is actually in excess of $38 billion.

In order to fulfill their obligations under the settlement, the four banks will have to show the monitor that they have provided nearly $19 billion in effective consumer relief in the form of refinancing, principal forgiveness, forbearance and other foreclosure prevention efforts such as short sales.

The monitor determined last year that Ally Financial had already delivered its obligation.

"The banks have made significant progress toward satisfaction of their total obligations, providing borrowers across the nation with much needed relief," Smith said in his report.

He noted that banks have also said they have made further progress in providing relief in 2013, which he is still reviewing.

Bank of America bears the lion's share of the settlement obligations. It is required to provide $8.5 billion in total consumer and refinancing relief.

The bank has fulfilled 97% of its obligation toward consumer relief, but has more to do toward providing refinancing relief, having met only 41% of its commitment.

Chase, Wells Fargo and Citi have on the other hand provided significantly more refinancing relief, in excess of their commitment but have more work left in other relief measures such as loan modifications and principal forgiveness.

Chase has also been credited with providing $2.78 billion in consumer relief, representing the bulk of its obligation of $3.67 billion.

Wells Fargo and Citi, however, lag further behind, having been credited with 55% and 46% of their obligations respectively.

Critics of the mortgage settlement continue to argue that banks have not done enough to provide relief for borrowers, arguing that banks are receiving credit for loan modifications they would have made irrespective of the settlement.

-- Written by Shanthi Bharatwaj New York.

>Contact by Email.

Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
BAC $14.04 -0.67%
C $44.22 -0.99%
JPM $61.23 -0.55%
WFC $48.95 0.02%
AAPL $93.21 -0.44%


Chart of I:DJI
DOW 17,660.71 +9.45 0.05%
S&P 500 2,050.63 -0.49 -0.02%
NASDAQ 4,717.0940 -8.5450 -0.18%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs