5 big US banks have cut mortgage debt by $19B
Ally, the former financial arm of General Motors Co., now has fulfilled its obligation for the relief it is required to provide under the settlement, Smith said.
The banks provided another $2.2 billion in relief by refinancing 56,400 home loans with an average principal balance of $211,834. As a result, borrowers will save an average of about $417 in interest payments each month, the report says.
The banks also had $3.5 billion worth of loans under trial modifications as of Dec. 31. That could lead to permanent reduction in loan balances of $138,802 if the trials are completed.
"I believe we have made progress, particularly as it relates to (mortgage) relief, but I know from my regular conversations with advocates across the nation that the banks and I have much more work to do on behalf of borrowers," Smith said in a statement.
In separate settlements announced last month, 13 banks agreed to pay a combined $9.3 billion to settle federal complaints that they wrongfully foreclosed on homeowners who should have been allowed to stay in their homes. The settlements ended a review of loan files required under a 2011 action by federal agencies.
They could compensate borrowers whose homes were seized because of abuses such as "robo-signing," when banks automatically signed off on foreclosures without properly reviewing documents. The settlements also will help eliminate huge potential liabilities for the banks: Aurora, Bank of America, Citigroup, Goldman Sachs, HSBC, JPMorgan Chase, MetLife Bank, Morgan Stanley, PNC Financial Services, Sovereign, SunTrust, U.S. Bank and Wells Fargo.
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