BofA Reduces $4.75B in Principal in 5 Months

Here’s an update on the National Mortgage Settlement Act and what Bank of America has completed so far.

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As part of the agreement under the national mortgage settlement, Bank of America has completed or approved more than $4.75 billion in principal reductions on first mortgages, with the average principal reduction exceeding $150,000.

Through the bank’s principal reduction program, 30,000 homeowners have been approved for a trial modification or received a permanent modification as of the end of September.

The $25 billion national mortgage settlement was reached in February between state and federal officials and the five largest mortgage servicers.

BofA said it’s on its way to meet the obligations under the settlement within the first year of the three-year agreement. BofA agreed to provide more than $7.6 billion in relief through first and second lien modifications and foreclosure prevention solutions.

However, BofA explained that under the agreement, banks will not receive full dollar-for-dollar credit for all of the assistance provided to customers, and the settlement monitor will make the crediting determinations.

According to a BofA release, borrowers who qualified for the program saved an average of 35 percent on their monthly mortgage payment.

The bank also expects to reach out to 200,000 eligible customers within the first year of the program.

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Southland Median Home Sale Price Climbs to 49-Month High; Sales Fall

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La Jolla, CA—The median price paid for a Southern California home rose again in September to a more-than-four-year high, the result of affordability-driven demand meeting a modest supply of homes for sale, and a big change in market mix. For the first time in nine months sales declined compared with a year earlier as low-end deals fell and foreclosure resales hit a nearly five-year low, a real estate information service reported.

The median price paid for a home in the six-county Southland climbed to $315,000 last month. That was up 1.9 percent from $309,000 in August and up 12.5 percent from $280,000 in September 2011, according to San Diego-based DataQuick.

Last month’s median price was the highest since the median was $330,000 in August 2008. The Southland median has risen month-to-month for eight consecutive months and has increased year-over-year for the past six months.

The median sale price has risen mainly for two reasons. First, higher demand, triggered largely by ultra-low mortgage rates, has coincided with a dwindling supply of homes for sale. Second, there’s been a big change in the types of homes selling this year. Far fewer are heavily discounted foreclosures, and many more are mid- to high-end move-up properties.

It appears that not quite half of the 12.5 percent year-over-year gain in last month’s median sale price can be attributed to a shift in the types of homes selling. In September, price levels for the lowest-cost third of Southern California’s housing stock rose 13.2 percent year-over-year, while they rose 7.7 percent in the middle and 3.5 percent in the top third.

In September, a total of 17,859 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties. That was down 20.4 percent from 22,438 sales in August, and down 1.6 percent from 18,149 sales in September 2011.

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