Five financial institutions that are part of the settlement provided $10.6 billion in consumer relief from March 1, 2012 to June 30, 2012 with $8.7 billion in the form of short sales in which customers sell their homes for less than the mortgage's value. Bank of America Corp, however, is lagging other banks in meeting its requirements to reduce customers' mortgage balances under the $25 billion Nationwide Foreclosure Settlement with the U.S. government, according to a report released on Wednesday.
The report is the first update on how the five banks are doing in meeting the terms of the March settlement with federal agencies and state attorneys general. The settlement was meant to resolve allegations that they mishandled foreclosures, and the banks have three years to meet the requirements or face penalties.
Unlike its competitors, Bank of America did not modify any first-lien mortgages to reduce the amount of money the borrower owes, and it also did not complete any refinances by June 30, according to the first report by Joseph Smith, the official monitoring the agreement.
Bank of America did allow $4.8 billion of short sales, the most of the five banks.
Bank of America spokesman Dan Frahm called the report an "early snapshot" and said the bank has made significant progress since June 30. The second-largest U.S. bank expects to meet all of its required targets in the first year, he said.
The bank has completed more short sales because they did not require new processes to be rolled out, he said.
The settlement requires banks to provide around $20 billion of consumer relief by reducing loan balances for struggling borrowers and refinancing loans for customers whose homes are worth less than the value of their mortgages.
JPMorgan Chase & Co completed $367 million in first lien modifications in which borrowers had their loan balances reduced, about half of all modifications.
Counting all types of relief, Bank of America provided $4.9 billion in assistance in the four-month period, followed by JPMorgan ($3 billion), Wells Fargo & Co ($1 billion), Citigroup Inc ($873.4 million) and Ally Financial Inc ($755.8 million.)
More than 137,000 customers have received an average of nearly $77,000 in relief under the agreement so far, according to the report.
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