Mortgage Settlement Monitor Issues First Report

So far, the banks have offered more than $10 billion in consumer relief, in the form of refinancing, modifications and loan forgiveness. Bank of America must pay the biggest share of the settlement, But the report showed the bank had not completed any refinancings or principal-reduction modifications.

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STEVE INSKEEP, HOST:

Let's follow up on another story. Earlier this year, five big banks settled the so-called robo-signing case, admitting they rushed the foreclosure processes for thousands of homeowners. Now, those banks are working to forgive and modify $20 billion worth of home loans.

As NPR's Yuki Noguchi reports, yesterday was the first chance to look at how banks are handling this part of the settlement.

YUKI NOGUCHI, BYLINE: Joseph Smith's first full report wasn't due until November, but he was eager to keep the issue top of mind.

JOSEPH SMITH: I hope that this report and the reports that follow, will inform a public debate around the mortgage issue that will lead to an improvement of that market and to better results for consumers in our economy.

NOGUCHI: Smith is the appointed monitor of the settlement agreement. And in the first three months, he said banks self-reported issuing $10.6 billion worth of consumer relief, including refinancings, and principal loan forgiveness.

Banks earn credits toward their total settlement amount, and not all relief counts dollar for dollar. So the $10 billion does not mean banks are half way to their goal. But, Smith says...

SMITH: This is a first step, and I'm encouraged by it.

NOGUCHI: Bank of America must pay the biggest share of the settlement. But the report showed the bank had not completed any refinancings or principal-reduction modifications.

But Dan Frahm, a spokesman for the bank, says the bank has made a lot of progress since the end of June.

DAN FRAHM: And we do feel that within the first year of the program, we will reach or exceed all program targets under the agreement.

NOGUCHI: The banks have three years to meet their targets.

Yuki Noguchi, NPR News.

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