Since March 1, the servicing banks have assisted 554,400 borrowers with principal reductions, loan modifications, refinances and other forms of relief.
HUD secretary Shaun Donovan noted the banks have provided $22.5 billion in principal reduction on 266,000 loans, which reduced the borrowers’ loan balances by $84,000 on average.
The settlement monitor’s report released last week shows the servicers have completed $11.6 billion in second-lien modifications and extinguishments, compared to $7.4 billion in principal reduction modifications on first mortgages.
The settlement banks—Wells Fargo, JPMorgan Chase, Bank of America and Citigroup—own large second-lien portfolios. Many of these loans have been written down because the corresponding first mortgage is delinquent.
Nevertheless, the banks are getting credit under the settlement agreement with the state attorneys general, Department of Housing and Urban Development and Department of Justice for providing this second-lien relief. So far, the banks have extinguished 170,300 second liens.
Meanwhile, the five banks, including Ally Financial, have completed 169,100 shorts sales. “The amount of this type of relief was approximately $19.5 billion or about $115,540 per borrower,” according to the monitor’s report.
Altogether, the five banks have provided $45.8 billion in cumulative relief under the settlement.
“We have already surpassed our initial expectations and the settlement is testament to the fact that large-scale principal reductions can be an important tool in our efforts to prevent foreclosures without incurring negative results,” the HUD secretary said.
The settlement monitor Joseph Smith recently certified that Ally Financial has completed all its obligations under settlement.