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Bank of America Slashes $4.75 Billion Off Mortgages

Thu, 15 Nov 2012 08:44:31 +0000

As part of the sweeping national mortgage servicing settlement that went into effect in March, officials at Bank of America said they are halfway to fulfilling their mandate of providing $7.6 billion worth of consumer relief.

The bank
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], which took on the burden of Countrywide Financial’s mortgage ills when it bought the company, has completed or approved a total of $15.8 billion in consumer relief for about 164,000 homeowners as of Sept. 30 and is on track, according to officials, to meet its total financial obligations within the first year of the three-year agreement. (Read More: How ‘Fiscal Cliff’ Could Affect Mortgage Interest Deductions.)

The settlement, which was supposed to right the wrongs of so-called “robo-signing” and other fraudulent mortgage servicing activities, credits banks for principal reduction, short sales, and other consumer relief, but the credits are not dollar for dollar. That’s why Bank of America’s $15.8 billion in relief so far is only half-way to its required $7.6 billion under the settlement.

According to officials on a conference call with reporters, Bank of America has approved or completed first-lien modifications for 30,000 customers, providing $4.75 billion in principal reduction.

In addition, 45,000 customers got home equity loan relief, totaling $2.5 billion. Finally, more than 62,000 customers completed qualifying short sales or deeds-in-lieu of foreclosure, which adds up to $7.4 billion in relief from unpaid principal balances on the loans. (Read More: Foreclosure Discounts Drying Up.)

Borrowers received an average $150,000 reduction in their first lien loan balances, resulting in a 35 percent reduction in monthly mortgage payments, according to bank officials. On second liens, the average relief through loan extinguishment to about 43,000 customers is more than $56,000 per borrower.

While officials would not give an exact amount, they estimated that 60 percent of the loans that received principal reduction were owned by investors and serviced by Bank of America, while 40 percent were held on the banks own books. (Read More: Bank of America Posts Profit.)

As for other aspects of the settlement, like providing customers with a single point of contact for mortgage assistance, officials said each bank representative is primary contact for between 70 and 75 customers.

All of the five banks that signed the National Mortgage Settlement are required to submit quarterly progress reports to the participating state attorneys general and the federal program monitor.

—By CNBC’s Diana Olick

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Article source: http://www.cnbc.com/id/49824237?__source=RSS*blog*&par=RSS

Homebuilders Face New Hurdles

Sat, 20 Aug 2011 13:59:50 +0000

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Builders are on track to construct the fewest single family homes in history this year. Total housing starts in July were down 1.7 percent, month to month, which may not sound like a lot, but when you break the number down, you see the problem.

Single family starts were down 4.9 percent, while multifamily starts rose 6.3 percent. Rental demand continues to rise, as consumer confidence in homeownership was decimated yet again by the recent debt turmoil in the economy.

I am reporting these numbers from a construction site. Mid-Atlantic Builders of Rockville, Md., is putting up the last phase of a large single-family development out in Bowie, Md., which is about 15 minutes outside the D.C. Beltway. They are a midsized builder, about 40 to 50 homes a year, which is about a third of the business they did just five years ago.

They are now smaller, leaner, but surviving thanks to their location near D.C., where unemployment is low, relative to the rest of the country. Business was even starting to pick up last winter, according to executive vice president Stephen Paul.

“We started what we call the spring market in February. We started out very strong, we had a good February, March, even into April,” he said. “What started to cause consumer confidence to wane was the escalation of gas prices, the debt issue with the government, and what’s going on in Europe.”

In other words: Confidence.

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Article source: http://www.cnbc.com/id/44162436?__source=RSS*blog*&par=RSS

Home Builders Face New Hurdles

Tue, 16 Aug 2011 19:17:43 +0000

Page 1 of 3 | Next Page
Show Entire Article

Builders are on track to construct the fewest single family homes in history this year. Total housing starts in July were down 1.7 percent, month to month, which may not sound like a lot, but when you break the number down, you see the problem.

Single family starts were down 4.9 percent, while Multi-family starts rose 6.3 percent. Rental demand continues to rise, as consumer confidence in homeownership was decimated yet again by the recent debt turmoil in the economy.

I am reporting these numbers today from a construction site. Mid-Atlantic Builders of Rockville, MD is putting up the last phase of a large single family development out in Bowie, MD, which is about 15 minutes outside the DC Beltway. They are a mid-sized builder, about 40 to 50 homes a year, which is about a third of the business they did just five years ago.

They are now smaller, leaner, but surviving thanks to their location near DC, where unemployment is low, relative to the rest of the country. Business was even starting to pick up last winter, according to executive VP Stephen Paul.

“We started what we call the spring market in February. We started out very strong, we had a good February, March, even into April. What started to cause consumer confidence to wane was the escalation of gas prices, the debt issue with the government, and what’s going on in Europe.”

In other words: Confidence.

Page 1 of 3 | Next Page
Show Entire Article

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Article source: http://www.cnbc.com/id/44162436?__source=RSS*blog*&par=RSS