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TH E M R EP O RT | 47 O R I G I NAT I O N S E R V I C I N G A NA LY T I C S S E C O N DA R Y M A R K E T SERVICING DEPARTMENT THE LATEST LOCAL EDITION THE LATEST LOCAL EDITION "Green Tree failed consumers who were struggling by prioritizing collecting payments over help- ing homeowners," said Richard Cordray, CFPB director. "When homeowners in distress had their mortgages transferred to Green Tree, their previous foreclosure re- lief plans were not maintained. We are holding Green Tree accountable for its unlawful conduct." In response to the CFPB's ac- tion, Mark O'Brien, chairman and CEO of Walter Investment, said that the agreement was "in the best interest of Green Tree, our consumers, our clients, and our shareholders." "As a company, we have been and continue to be committed to properly serving homeowners and helping them remain in their homes," O'Brien said. "We con- tinue to develop and deploy best practices in our servicing opera- tions and believe these standards will serve us well as we partner with our consumers to support them in their goal to achieve sustainable homeownership." O'Brien added, "With this settlement, the company and our employees will maintain our focus on the continuous improve- ment of our procedures and practices, which will benefit all consumers and all stakeholders. We will continue to work closely with regulators, clients, and other constituencies to ensure that we maintain the significant align- ment of interests that exists in the mortgage servicing industry." Bank of America Credited With $1.19 Billion Toward Settlement Agreement THE HEFTY CHUNK OF CHANGE WILL GO TOWARD THE $7 BILLION IN CONSUMER RELIEF THE BANK IS PAYING FOR PEDDLING TOXIC MORTGAGE- BACKED SECURITIES. NORTH CAROLINA // Independent monitor Eric Green reported that Bank of America, headquartered in North Carolina, has been credited with approxi- mately $1.19 billion toward the $7 billion (17 percent) in consumer relief the bank agreed to pro- vide as part of the August 2014 settlement with the Department of Justice over the selling of toxic mortgage-backed securities. In his second of the moni - tor's required reports under the settlement agreement, Green said he conditionally approved $1,181,390,703 in consumer relief for Bank of America for the first quarter of 2015, along with $8,948,684 worth of credit in his initial report released in February, for a combined total of $1,190,339,386 in consumer relief for the bank out of the $7 billion prescribed by the settlement. The deadline for Bank of America to provide the remaining $5.81 bil - lion, or 83 percent of the obliga- tion, is August 31, 2018. Green reported that most of the $1.181 billion Bank of America was credited with in Q1 was based on 2,938 first lien principal forgiveness loan modifications. Those modifications, which include principal forgiveness, interest rate reduction, and bring - ing loans current without penalty, are intended to make mortgages more affordable for struggling homeowners. "The report demonstrates we are extending meaning - ful relief to homeowners who, despite the economic recovery most Americans have felt, have continued to struggle financially," Bank of America spokesman Dan Frahm said. "The monitor has reviewed and certified $1.2 billion of the crediting in line with the bank's May submission. Combined with about $5 billion in additional anticipated crediting for recently completed activity and relief in process, we are progressing well toward our total commitment. We strongly encour - age customers who have received information from the bank about these programs to carefully consider accepting this relief and realizing their benefits." According to Green's report, evidence that the consumer relief provided by Bank of America is positively impacting homeowners includes: » » Borrowers have reduced their monthly mortgage payment by an average of 38 percent, from $1,666 down to $1,030. » » The Pre-modification interest rate has been reduced from 5.5 percent to 2.18 percent. » » The share of underwater bor- rowers prior to receiving the modifications was 93 percent; the reduction in loan principal has resulted in that share being reduced to less than 2 percent. » » Fifty-six percent of the modifi- cation credit Bank of America earned was for loans modified in federally designated "Hardest Hit Areas." » » The average unpaid balance on loans, excluding unpaid fees and interest, prior to the modifications was $216,527. According to Green, the average principal forgiveness for these loans (including unpaid fees and interest) exceeds $140,000. » » Twenty-seven percent of the modifications occurred in the six states that participated in the settlement, and overall the modi - fications occurred in 47 states plus the District of Columbia. "This kind of modification can make a critical difference in the lives of affected homeowners strug - gling to stay in homes burdened by loans made during the height of the property bubble and devastated by the financial crisis," Green said. On August 20, 2014, Bank of America settled with the Department of Justice and six states for a record $16.65 billion to resolve claims that the bank as well as its Countrywide, Merrill Lynch, and First Franklin divisions packaged and sold toxic mortgage- backed securities and collateralized debt obligations in the years lead - ing up to the financial crisis. Under the settlement agree- ment, Bank of America agreed to pay $9.16 billion directly to federal agencies and six states; $7 billion in consumer relief, which may include first lien princi - pal forgiveness or forbearance, second lien extinguishment, and community reinvestment and neighborhood stabilization; and $490 million for the payment of consumer tax liability as a result of consumer relief. "The report demonstrates we are extending meaningful relief to homeowners who, despite the economic recovery most Americans have felt, have continued to struggle financially." — Dan Frahm, Bank of America SERVICING