Five of the biggest U.S. banks have agreed to cut struggling homeowners’ mortgage balances by $6.3 billion, which will provide relief for abuses suffered under foreclosures during worst of the housing crisis. The money owed to and subsequently erased by Ally Financial, Bank of America, JPMorgan Chase, Citigroup and Wells Fargo is part of a larger settlement comprised of $26.1 billion in total home loan relief.
More than 309,000 borrowers received some form of mortgage relief between March 1 and Sept. 30 of this year, according to a report. Although not exactly evenly distributed, that would translate into roughly $84,385 per homeowner. Unfortunately, the agreement will reduce mortgage loans for only a fraction of those Americans who are underwater and thus the most stressed since they owe more on their mortgage than their homes are worth.
The settlement is expected to help about a million of the approximately 11 million underwater households.