BofA gave $15.8B in mortgage aid to borrowers

• BofA reports assistance to 164,000 borrowers under settlement
• Bank expects to fulfill obligations by March
• Other mortgage servicers' reports due next week

Bank of America says it has extended $15.8 billion in mortgage relief to 164,000 homeowners this year under a national settlement over foreclosure abuses and will fulfill its obligations by March.

That time frame is two years faster than required under the $25 billion settlement reached in February between five mortgage servicers and state attorneys general and federal officials.

JPMorgan Chase says it, too, has made good progress and expects to complete its commitment "well ahead of schedule," says spokeswoman Amy Bonitatibus.

Through September, Chase has extended $7 billion in relief to 75,000 homeowners, it said Wednesday.

Bank of America's share of the settlement is $11.8 billion; Chase's share is $5.3 billion.

The sooner the servicers provide the relief the better, says Iowa Attorney General Tom Miller. He led the states' efforts to win the settlement after revelation of widespread foreclosure abuses.

"The housing market needs help now. Homeowners need help now," Miller says.

Through Sept. 30, BofA says 30,000 homeowners had part of their first liens forgiven; $150,000 was the average amount.

The bank also approved 62,000 short sales or deeds-in-lieu of foreclosures — both of which are alternatives to foreclosure.

Chase forgave an average $97,000 in first-lien principal for 30,000 homeowners, it says.

Chase also did 12,000 refinances, which completed its refinance part of the settlement. It says those saved homeowners an average of $250 a month.

The refinance portion of the settlement is intended to help homeowners who are current on loans but can't tap low interest rates because they lack equity.

The five companies are to deliver $20 billion in relief to homeowners, but the actual amount of relief will be higher because of the way it's counted.

For example, the companies get more credit for forgiving principal on first liens than seriously delinquent second liens.

The​ other servicers — Wells Fargo, Citigroup and Ally Financial — were expected to deliver their updated results Wednesday to the national monitor appointed to oversee the settlement.​​​

The monitor, former North Carolina banking commissioner Joseph Smith, is expected to release a report next week on the overall progress of the program.

The companies get bigger credits for relief extended in the first year.

BofA has been "very aggressive" says Paul Miller, banking analyst at FBR Capital Markets. He says the other servicers will push hard to get the settlement behind them, as well.

If BofA makes its one-year deadline, it will be a good thing, says Ira Rheingold, executive director of the National Association of Consumer Advocates.

He says the biggest test of the settlement's effectiveness will be whether it encourages more lenders to use principal reduction to avoid foreclosure on more loans.

He also says short sales can be a good "tool" to help certain homeowners. Some consumer advocates have criticized the settlement for giving servicers credit to do short sales, which they were increasingly doing before the settlement was reached.

Short sales occur when lenders allow homes to sell for less than what borrowers owe.

Realtors say servicers are much more short-sale friendly now. Three years ago, short sales would often linger, says Sarah Arnold, Realtor at Pacific Union International in Orinda, Calif.

Now, servicers are "putting heat on us, as agents, to get information to them," Arnold says.

When it was announced, the settlement was expected to help roughly 1 million homeowners get mortgage debt or interest rate relief.

Another 750,000 who lost homes to foreclosure were to receive restitution of about $1,500.

The settlement administrator sent notice letters and claim forms in September and October to borrowers who lost homes to foreclosure between January 1, 2008, and Dec. 31, 2011, and whose loans were serviced by one of the five companies.

Those borrowers have to file claims by Jan. 18. More information is at www.nationalmortgagesettlement.com.