Banks Pay 2.

2 Billion in Agreement Reached on Foreclosures By Korollos Shalaby

Five U.S. banks have provided 2.2 billion in mortgage relief to customers under an agreement reached on charges related to foreclosures, according to a report released Monday.

The report said that Bank of America Corp improved their clients preferential mortgage modifications.

Bank of America awarded 889.2 million dollars in modifications that reduced customer loan balances, after not having given anything in August. Total JPMorgan Chase & Co payouts amounted to 903.1 million dollars in modifications, the largest amount among the five banks.

The report released by Joseph Smith, the former commissioner of the State Bank of North Carolina who serves as auditor of the agreement, said the five banks together have provided relief to customers totaling around 2.2 billion, from 10.6 million in August.

The banks reached an agreement in February with state and federal authorities to resolve accusations of foreclosures deemed to be incorrect and misleading.

The agreement implies that banks provide about 20 billion dollars in aid to customers with different actions, such as reducing the balance of loans and borrowers refinance troubled loans for customers whose homes are worth less than the value of their mortgages.

Bank of America was the bank that was to provide more aid equivalent to 11.8 billion in total relief to customers, followed by JPMorgan with 6 billion.

The other banks are Wells Fargo & Co (2.5 billion dollars in relief), Citigroup Inc (1,100 million) and Ally Financial Inc (587.8 million dollars).

"The relief that banks have reported is encouraging," Smith said in a statement, noting that the obligations of the banks still must be reviewed and accredited.

This comes at the same time that applications for home mortgages in the United States rose for the third straight week, driven by increased demand for refinancing, according to data realeased Wednesday.

The Mortgage Bankers Association (MBA) said its seasonally adjusted index of mortgage application activity, which includes both refinancing loans to buy homes, increased by 7% in the week of Jan. 18.

The seasonally adjusted index of refinancing applications increased 7.7% MBA, while the gauge of loan requests for home purchase, the principal measure of property purchases, gained 2.5%.

The refinance share of total activity regarding mortgages remained stable at 82% of applications. Mortgage rates for a 30-year fixed mortgage averaged 3.62%, were up 1 basis point over the previous week. The survey covers over 75% of residential mortgage applications U.S. retailers, according to MBA.

Korollos Shalaby is a nationally acknowledged mortgage expert with over 6 years experience as a loss mitigation expert and mortgage finance consultant. He has owned several companies and has been at the forefront of all lending and banking practices since 2006.

Tags: foreclosure, mortgage relief, Bank of America