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Settlement Monitor: BofA Credited for $1.18B in Consumer Relief

Bank of America has received approval for additional credit during the first quarter of 2015 from the independent monitor overseeing its compliance with the requirements of its mortgage settlement agreement.

Eric Green, in his second report under the agreement, said he has conditionally approved Bank of America for roughly $1.18 billion in credit for the first quarter, bringing the cumulative credit thus far to $1.19 billion or 17% of the $7 billion in consumer credit required by the end of August 2018. The vast majority of the credit Bank of America earned stemmed from nearly 3,000 first-lien principal forgiveness loan modifications.

The loan modifications are aimed at helping homeowners make their mortgages more affordable and include forgiveness of principal, reduction of interest rates and bringing delinquent loans current without penalty.

"This kind of modification can make a critical difference in the lives of affected homeowners struggling to stay in homes burdened by loans made during the height of the property bubble and devastated by the financial crisis," Green said in a July 31 news release announcing his latest report.

Green also noted that the relief has already had a positive impact. For instance, the average monthly mortgage payment has fallen by 38% to $1,030, and interest rates have dropped to 2.18% from their premodification level of 5.5%. Additionally, the principal reduction has led to less than 2% of homeowners being underwater versus 93% before the modifications.

The modifications were also heavily focused on federally designated hardest-hit areas.

Green also detailed additional consumer relief Bank of America had undertaken during the first quarter included in the overall total. Bank of America received approximately $76 million of credit for disbursing loans to finance 11 rental housing developments featuring more than 1,000 affordable housing units, nine of which meet the definition of "Critical Need Family Housing."

Another $22 million in credit was approved for donations Bank of America made to Community Development Financial Institutions, land banks and nonprofits, HUD-approved housing counseling agencies and state-based organizations providing legal assistance for foreclosure prevention or community redevelopment.

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