The five banks involved in a sweeping national mortgage settlement reported providing $350 million in mortgage relief to 7,500 borrowers in North Carolina through the end of last year, according to a report released Thursday by the settlement’s monitor.
But less than 10 percent -- about $35 million -- of the total has come from principal forgiveness on homeowner’s mortgages. The largest amount, more than one-third, has come from short sales, which require borrowers to leave their homes.
Another third now comes from second-lien extinguishments; for example, when a bank wipes out a home equity loan. Nearly 3,000 homeowners in the state had their second-liens extinguished, the bulk of which came in the last three months of the year.
The pattern was largely borne out at the national level, where the banks reported a total of $45 billion in total relief. About $19.5 billion came from short sales, and $11.6 billion in second-lien extinguishments and modifications. About $7.4 billion has come from principal forgiveness.
Never miss a local story.
This was the third progress report under the settlement from monitor Joseph Smith, who previously was the North Carolina commissioner of banks. The settlement went into effect March 1 and included Bank of America, Wells Fargo and three other large servicers. Combined, the banks are required to provide $25 billion in cash payments and mortgage relief.
The dollar figures in Thursday’s report do not reflect total progress toward the requirements. Not all forms of relief receive dollar-for-dollar credit to the $25 billion total. Some forms, including some short sales, can receive at little as 20 percent credit.
In a news release, Bank of America said that it has made “significant progress” in its national mortgage settlement programs, and said it has provided “real and meaningful relief.”