Independent monitor Eric Green reported on Friday that Bank of America had earned approximately $1.19 billion out of the $7 billion, or 17 percent, in consumer relief the bank agreed to provide as part of the August 2014 settlement with the Department of Justice and six states over the selling of toxic mortgage-backed securities. The deadline for Bank of America to provide the remaining $5.81 billion, or 83 percent of the obligation, is August 31, 2018.
Green reported that most of the $1.18 billion credit Bank of America earned in Q1 was based on 2,938 first lien principal forgiveness loan modifications. Those modifications, which include principal forgiveness, interest rate reduction, and bringing loans current without penalty, are intended to make mortgages more affordable for struggling homeowners. The modifications have resulted in an average monthly mortgage payment reduction of 38 percent for borrowers.
The number of borrowers who have negative equity, or are underwater on their mortgages, declined by approximately one million, or 26 percent, in the five-month period from January 1, 2015, until the end of May, according to Black Knight Financial Services' June 2015 Mortgage Monitor released today. Though three million borrowers nationwide remain underwater, representing about 6.1 percent of the active mortgage universe, the number of underwater borrowers is down about 79 percent from the peak of 15 million in 2010.