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

Bank of America Trumpets $15B in Mortgage 'Relief'

NEW YORK ( TheStreet) -- Bank of America (BAC - Get Report) said Wednesday it has offered $15.8 billion in mortgage relief to customers as part of its obligation under the National Mortgage Settlement.

The relief comes in the form of principal reductions, second lien forgiveness, short sales and interest rate relief, among other things.

As of Sept 30, the bank had approved 30,000 homeowners for first lien principal reductions totaling $4.75 billion. About 5,800 had successfully completed their three-month trial and converted to permanent modifications.

The program resulted in an average reduction of $150,000 in principal and 35% reduction in monthly payments. The bank is reducing principal on loans it owns and services as well as those it services for others. Fannie Mae, Freddie Mac, FHA and VA loans are not participating in the reduction.

The bank has also extinguished second-liens for 43,000 customers, with the average financial relief amounting to $56,000. About 1,400 additional loans have been modified, reducing the balances owed by a total of $100 million.

Bank of America is also reducing interest rate at no cost to qualified borrowers who are current on their payments but owe more than 80% of their property value. Rates on qualifying loans are currently being reduced to 4.25%. The bank estimates customers are on an average receiving a 2 percentage point interest rate reduction.

As of October 31, 23,000 homeowners - more than half of the bank's estimated eligible population - have been offered this assistance, the bank said.

The bank is also required to offer foreclosure alternatives under the agreement. More than 62,000 customers have completed qualifying short sales or deeds-in-lieu of foreclosure, providing a total of $7.4 billion in relief from unpaid principal balances on the loans.

Federal regulators across 49 states, earlier this year, entered into a $25 billion settlement with the nation's biggest mortgage servicers including Bank of America, JPMorgan Chase (JPM - Get Report), Wells Fargo (WFC - Get Report), Citigroup (C - Get Report) and Ally Financial after banks were found to have improperly foreclosed upon borrowers.

Bank of America is required to provide $8.58 billion in mortgage relief in the form of principal writedowns, refinancing and other programs. Servicers will receive only partial credit for every dollar spent on some of the required activities
1 of 2

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 $14.56 0.00%
C $46.28 0.00%
JPM $63.20 0.00%
WFC $49.98 0.00%
AAPL $93.74 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs