Wednesday, October 17, 2012

Bank of America hits $4.75 billion in principal reduction

Bank of America announced Wednesday that it has now forgiven $4.75 billion in first mortgage principal under the terms of the national mortgage settlement it signed with four other large banks this spring.

About 30,000 homeowners had been approved for principal forgiveness as of Sept. 30, meaning they had started a trial modification or made the required three payments to make a trial permanent.

The average reduction for homeowners in the program was $145,000, the bank said. Their average monthly payment dropped 35 percent.

They principal forgiveness will go toward the $7.6 billion of homeowner assistance the Charlotte bank is required to provide as its part of the $25 billion mortgage servicing settlement reached with state attorneys general and federal agencies.

UPDATE Thursday: More than 400 homeowners in North Carolina have been approved for principal forgiveness, totaling more than $26 million.