Bank of America has conditionally completed 97% of the $7 billion in consumer relief it agreed to provide as part of its 2014 settlement with the Department of Justice and six states, the agreement’s independent monitor reported.
The settlement’s monitor, Eric Green, conditionally approved roughly $450 million of consumer-relief credit in his seventh report on Bank of America’s adherence to the agreement, reflecting requests made by the bank in July and August. Altogether, the amount of consumer relief credited to Bank of America has conditionally reached $6.8 billion, according to a news release Wednesday.
“Based on credit testing that is underway, it appears that Bank of America is on target to fulfill its obligations under the settlement agreement this year, well ahead of the four-year deadline,” Green said in the release.
Green also reported that 53% of the loan modifications made to fulfill the settlement’s consumer relief target have occurred in Department of Housing and Urban Development-designated “Hardest Hit Areas,” which have a high concentration of distressed or foreclosed properties. Many of the modifications have targeted VA- or FHA-guaranteed loans.
Additionally, the modifications made for first-lien principal reductions, which constitute the largest category for consumer relief, have reduced the financial burden for consumers who receive them. Green’s report noted that the average principal reduction on modifications to date is more than 50% and the average loan-to-value ratio has fallen from 176% to 75%. The average monthly payment has also dropped 37%, or by $599 per month.