Bank of America has paid more than $2.1 billion in consumer relief in the second quarter, making strides in paying the mortgage crisis-related penalties imposed by the Justice Department, an independent monitor announced Tuesday.
Eric Green, the settlement monitor, has conditionally approved a cumulative credit to the bank worth $3.3 billion, which is about half of what Bank of America owes in consumer relief penalties tied to the
The $1.6 trillion-asset company had
Bank of America's consumer relief payments between April and June went towards loan modifications and originations of new home loans to low- or moderate-income borrowers, as well as donations to community development funds and subordinated loans to support the construction of low-income housing.
Green said the bank had targeted its funding effectively. For instance, the principal forgiveness program resulted in a reduction of the loan-to-value ratio to 76% from 180%, he found. And more than 56% of the loan modifications were related to homes designated in Hardest Hit Areas by the Department of Housing and Urban Development.
"The point of the consumer relief obligations under the settlement agreement is to make it easier for homeowners to build equity and stay in their homes and to make it less of a struggle for low-income families to find affordable housing," said Green, a professor at Boston University School of Law, in a Nov. 3