Homeowners Mortgage Relief Averages $76,615
Homeowners have gotten the much needed relief according to the Office of Mortgage Settlement Oversight. Homeowner mortgage relief includes deed in lie, foreclosure and short sales.
The nation’s five largest banks have provided nearly $10.6 billion in mortgage relief to homeowners under a settlement that was struck with the states and federal government earlier this year, according to a preliminary progress report.
The report was issued by the Office of Mortgage Settlement Oversight, which is monitoring the $25 billion settlement. In total, the five banks –Bank of America (BAC, Fortune 500), Wells Fargo (BWF), Citibank,JP Morgan Chase (JPMPRX), and Ally Financial (ALLYPRB) — have helped some 138,000 homeowners and have offered relief averaging $76,615 per borrower between March 1 and June 30, the office reported.
Nearly half of the total, $4.9 billion, comes from Bank of America. Ally Financial, the smallest of the lenders, has submitted just over $500 million in claims.
The settlement was meant to atone for foreclosure processing abuses dating back to 2008. Under the deal, which was approved by a federal judge in April, the banks get credit for helping homeowners avoid foreclosure, by doing such things as reducing the principal on loans and refinancing mortgages to lower interest rates.
So far, though, most of the credits banks have received for relief efforts — 80% — have been for debt forgiveness for deed in lieu of foreclosure or short sales. In a deed in lieu, homeowners hand over ownership of their home to the bank in exchange for debt forgiveness. In a short sale, homeowners sell their home at a price that is less than what they owe the bank and the bank agrees to absorb the loss.
In both cases, homeowners ends up losing their home. Not only that, but the hit on their credit score makes it harder to secure a mortgage in the future.
Read more here and let us know if you have any questions on short sales or mortgage relief.