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October 20, 2014

Banks Extend More Aid to Home Owners Than Expected

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Banks Extend More Aid to Home Owners Than Expected

So far, more than 300,000 home owners have gotten their mortgages modified, interest rates reduced, or debt forgiven by banks as part of a $26 billion mortgage settlement, according to a new report by the Office of Mortgage Settlement Oversight, a watchdog agency for the settlement.

The settlement reached earlier this year among the nation’s five largest banks and attorneys general stems from allegations of wrongdoing in banks’ paperwork and processing of foreclosures. 

In some areas of the settlement, banks are doing far more than anticipated, CNNMoney reports. For example, principal reductions on mortgages were expected to average about $20,000 for home owners. The actual reductions have been nearly six times higher than that.

Under the settlement, 309,385 borrowers have received some type of mortgage relief so far. Of that number, 21,833 borrowers have received loan modifications to lower their mortgage debt by an average $116,929 each, according to the government report. Nearly 31,000 borrowers have received trial modifications—if completed, those will average $135,929 per borrower. 

The banks involved in the settlement are Bank of America, Citibank, JPMorgan Chase, Wells Fargo, and Ally Financial. 

Source: “Banks Modify Home Loans, Reduce Rates for 300,000,” CNNMoney (Nov. 19, 2012)

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