Bank of America has begun the process of paying out$ 7 billion in consumer relief as part of its record $16.65 billion settlement with the U.S. Department of Justice and six states last August, according to an announcement on the settlement monitor's website. Professor Eric D. Green, independent monitor of the settlement, announced in his initial progress report that Bank of America had correctly claimed credit of approximately $8.94 million for 100 first-lien loan modifications meant to help make mortgages more affordable for struggling homeowners.
The loan modifications included forgiveness of principal, reduction of interest rates, and bringing delinquent loans current without penalty. Green said the first 100 loan mods were mostly meant to test monitoring standards and procedures and were too small a sample size to determine any conclusions for the future regarding the consumer relief the bank will provide. Per the settlement agreement, Bank of America's deadline for providing all of the $7 billion in consumer relief is August 31, 2018.
The nation's mortgage delinquency rate for loans 60 days or more overdue continued its steady decline in the fourth quarter of 2014, falling to 3 point 29 percent – representing a 14 percent drop from the same quarter in 2013, when a 3 point.84 percent mortgage delinquency rate was reported, according to TransUnion's latest mortgage report released Wednesday. Q4 was the 12th straight quarter in which the mortgage delinquency rate declined.