BANK OF AMERICA
Bank Provides Principal Reduction, Lower Interest Rates, Other Relief to Eligible Customers
Bank of America completed or approved nearly $30 billion in real and meaningful relief to more than 330,000 homeowners and offered life-of-loan interest rate reductions to more than 40,000 others in 2012 through programs of the National Mortgage Settlement (NMS). The bank reported its progress through December 31, 2012 in a quarterly report to the federal program monitor, who released the details today.
Bank of America’s performance across all programs continues to reflect significant progress since various NMS programs were implemented between May and August 2012, and the bank remains on track to meet its total financial obligations by the end of the first quarter of 2013. 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, Joseph A. Smith, Jr., at a future date.
Progress across Bank of America’s consumer relief programs through December 31, 2012 includes:
Principal reductions on first liens
More than 42,500 homeowners have been approved for offers of first-lien principal reduction since May, and more than 21,000 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 about $160,000 in reduced principal balance and 44 percent average reduction in monthly payments.
More than 4,200 additional borrowers have received complete forgiveness of a total of $263 million in principal forbearance pre-dating the March 1 implementation of the settlement.
Second-lien extinguishments and modifications
Nearly $9.7 billion in assistance to second-lien holders has been offered through home equity debt elimination and extinguishment of the lien, releasing any claim by the bank to the mortgaged property. More than 141,000 borrowers have received second-lien extinguishment offers providing average financial relief of about $68,000.
About 2,200 additional loans have been modified through the Making Home Affordable second-lien program, reducing the balances owed by a total of $158 million.
Interest rate reductions
With most of the eligible population in the pipeline by the end of 2012, Bank of America is confident that goals for the interest rate reduction program will be met in the first quarter of 2013.
Offers extended through the end of 2012 presented average rate reductions of 2 percent, leading to average payment savings of $234 each month for the life of the loan.
Borrowers completing short sales may receive additional relief under the settlement through enhanced relocation assistance payments above $1,500 and permanent waivers of the deficiency amount.
About 23,500 borrowers who completed short sales have received a total $162 million and enhanced relocation benefits.
In addition to the $11.8 billion in deficiencies waived on short sales completed between March 1 and December 31, Bank of America has waived any future claim for recourse on more than $1 billion in additional deficiencies on about 18,600 short sales completed prior to the NMS implementation.
Bank of America also reported to the monitor that it was in compliance with all servicing standard metrics in force under the NMS in the fourth quarter.
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. The company provides unmatched convenience in the United States, serving approximately 53 million consumer and small business relationships with approximately 5,500 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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