Settlement Helps Market
Washington— A year has passed since state and federal authorities reached a $25 billion settlement with five of the nation’s largest banks over fraudulent foreclosure practices that were commonplace after the housing bust.
On Thursday, the court-appointed monitor of the settlement issued a report showing that more than half a million homeowners have received about $46 billion worth of loan modifications, short sales, refinancings and forbearance.
The activity spans from March through December and was self-reported by the banks involved in the agreement: Wells Fargo, Bank of America, JPMorgan Chase, Ally Financial and Citigroup.
“The servicing settlement has contributed to a recovery in our housing market and has already exceeded our expectations,” said Shaun Donovan, secretary of the Department of Housing and Urban Development, during a call with reporters. He noted that authorities initially anticipated about $34 billion in assistance but now expect consumer relief to exceed $50 billion.
The news arrives as the housing industry is reporting a sharp decline in seriously delinquent residential mortgages.
Home loans that were 90 days or more past due fell to 7 percent in the fourth quarter, the lowest level since 2008, according to the Mortgage Bankers Association. Struggling homeowners are catching up on payments or benefiting from alternatives to foreclosure as the economy improves.