NEW YORK (
Bank of America
(BAC - Get Report) is racing to fulfill its obligations under the national mortgage settlement.
The bank said Wednesday that it had provided $4.75 billion in first-lien principal reductions in the first five months since the settlement was approved by the court and that it intends to meet its total obligation of more than $7.6 billion in consumer relief within the first year of the three-year agreement.
Banks do not receive full credit for every dollar of assistance provided to customers, so the $4.75 billion in first lien principal reduction offered so far might only partially meet BofA's $7.6 billion requirement.
The government appointed independent settlement monitor will determine the credit that Bank of America will receive.
Still, the bank appears to have made substantial progress in recent months. When the settlement monitor released a
in August, Bank of America was found to be lagging in providing mortgage modifications under the settlement.
While the other four banks in the settlement-
(JPM - Get Report)
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(WFC - Get Report)
- had offered about $750 million in first-lien principal forgiveness, Bank of America had provided none.
On the other hand , the bank executed $4.7 billion in short sales- more than all other four combined.
Bank of America later clarified that it had made significant progress after the period covered by the report, which was only from March through Jun. 30.
According to the release Wednesday, as of Sept.30, about 30,000 homeowners had been approved for three-month trial home loan modifications.
Among borrowers who began their trial plan period more than three months ago, more than 85 percent successfully completed the process and qualified for a permanent modification, the bank said.
Monthly mortgage payments are dropping by an average 35%, the bank said, with the average reduction in principal balance more than $150,000 for those qualifying for the program.
Bank of America saw an increase in charge-offs in the
, in part due to a $435 million charge it took for the extinguishment of non- purchased credit impaired loans in the home equity portfolio.