BANK OF AMERICA
Bank Believes Consumer Relief Provision Has Been Exceeded; Continues Outreach to Offer Assistance to Remaining Eligible Customers
Less than a year after beginning implementation of principal reduction and other consumer relief programs under the National Mortgage Settlement (NMS), Bank of America completed and approved assistance to about 320,000 customers totaling $29.2 billion in aggregate relief across all settlement programs through March 31. Nearly 46,500 additional homeowners who are making timely payments on loan balances that exceed the current value of the property have received offers of life-of-loan interest rate reductions to lower their monthly costs.
NMS progress reports through the first quarter for the five participating banks were released today by federal monitor Joseph A. Smith. They reflect the concentrated effort of Bank of America to provide the relief to consumers in urgent need of assistance with their mortgages, and most eligible customers had already been contacted by the end of last year. As a result, a slowing volume of new offers was reported in the first quarter.
Bank of America believes it has made right party contact with the vast majority of eligible borrowers, and has completed sufficient consumer relief to date to exceed its settlement obligations, subject to review, crediting and certification by the monitor. Even after certification that it has met its obligations, the bank will continue to exhaust attempts to contact any remaining qualifying borrowers and provide prescribed assistance to them.
Bank of America’s progress across the NMS programs through March 31, 2013 includes:
The figures provided here represent the bank’s reporting of the actual amount of assistance offered to customers. The determination of credits earned toward the settlement obligations will be based on the types of relief and the amount of relief completed from those offers and will be made by the federal monitor at a future date.
The majority of credits will be earned through modifications that reduce principal, which generally are credited at a higher percentage of dollar value than relief from other programs. Also reflected in the first quarter report, Bank of America has restated some reporting for the fourth quarter, removing certain loans to more accurately reflect expected crediting under the monitor’s review.
Principal reductions on first liens
More than 42,000 homeowners have been approved for offers of first-lien principal reduction since May, and nearly 29,000 had completed their required three monthly trial payments and converted to a completed modification.
The program offers principal reductions to as low as 100 percent of current value and is resulting in an average of more than $160,000 in reduced principal balance and 44 percent average reduction in monthly payments.
As reported in the fourth quarter, more than 4,200 additional borrowers had a total of $263 million in principal forbearance predating the March 1 implementation of the settlement completely forgiven from their loan balance.
Second-lien extinguishments and modifications
More the $9.8 billion in assistance to second-lien holders has been completed through home equity debt elimination and extinguishment of the lien, releasing any claim by the bank to the mortgaged property. About 142,000 borrowers have received second-lien extinguishment offers providing average financial relief of more than $64,000. All of the eligible extinguishments were completed last year.
About 2,200 additional second loans have been modified, reducing the balances owed by a total of $176 million.
Although Bank of America continues to process and approve a high volume of short sales when home retention alternatives are not possible, the bank is not claiming any additional NMS credits from short sales beyond what had been reported through December 31, 2012. The bank will emphasize home retention measures in its request to the monitor for certification, and expects its strong performance assisting borrowers with principal reduction will result in sufficient credits to reach its settlement obligations without reporting additional short sales for credit.
Interest rate reductions
Interest rate reduction modifications completed through March 31 presented average rate reductions of nearly 2 percent, leading to average payment savings of $189 each month for the life of the loan. More than 12,000 contracts were completed in the first quarter alone, and significant quarter-to-quarter gains in the number of completed refinancing contracts are expected to continue, as offers and applications are processed and underwritten.
Bank of America
Bank of America is one of the world's largest financial institutions, serving individual consumers, small- and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. We serve approximately 52 million consumer and small business relationships with approximately 5,400 retail banking offices and approximately 16,300 ATMs and award-winning online banking with 30 million active users. Bank of America is among the world's leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 3 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients through operations in more than 40 countries. Bank of America Corporation stock (NYSE: BAC) is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange.
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