5 big US banks have cut mortgage balances by $6.3B

Associated Press Modified: November 19, 2012 at 2:00 pm •  Published: November 19, 2012
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Lenders also completed permanent reductions of about $1 billion before March 1, according to the report.

U.S. Department of Housing and Urban Development Secretary Shaun Donavan said that, while their job is not done, mortgage servicers are on track to fulfill their consumer relief commitments next year.

"Homeowners are finally beginning to see the light at the end of the tunnel," he said during a conference call with reporters.

The federal government and state attorneys general for 49 states forged the $25 billion settlement in February with five banks: Ally Financial Inc., Bank of America Corp., JPMorgan Chase & Co., Citigroup Inc. and Wells Fargo & Co.

The pact ended a painful chapter of the financial crisis when home values sank and millions edged toward foreclosure. Many companies had processed foreclosures without verifying documents.

The agreement will reduce mortgage loans for only a fraction of those Americans who owe more than their homes are worth. About 11 million households are underwater, and the settlement is expected to help about a million of them.

Of the $6.3 billion in reduced mortgage principal, according to Smith's report, Bank of America had provided $3.65 billion; JPMorgan, $1.3 billion; Citigroup, $551.3 million; Ally, $195.1 million; and Wells Fargo, $608.8 million.