Bank of America, JP Morgan, Wells Fargo Hurrying Homeowner Aid After Mortgage Fraud Fiasco; Deadline Feb. 28

Five major banks involved in last year's mortgage fraud are generously completing their requirements in a government settlement and hastening to resolve aid to affected homeowners by the end of this month, reported Bloomberg.

Bank of America Corp., JPMorgan Chase & Co., along with three other big banks that participated in last year's $25 billion National Mortgage Settlement are providing relief to homeowners after they were found mishandling mortgage practices and foreclosures, reported Reuters.

In the recent report released by the Office of Mortgage Settlement Oversight, the banks, which also include Wells Fargo & Co, Citigroup Inc and Ally Financial Inc, had assisted recovering homeowners with $45.83 billion in principal reductions, refinancing of homes and forgiving home-equity loans between the beginning of March and end of December of last year, reported Bloomberg. The banks have until Feb. 28 to complete all principal reductions. 

"I believe we have made progress, particularly as it relates to consumer relief, but I know from my regular conversations with advocates across the nation that the banks and I have much more work to do on behalf of borrowers," said Joseph Smith, a former North Carolina bank commissioner and the Oversight's supervisor. 

Out of the total consumer relief, nearly $24.7 billion went towards home ownership relief. In the first ten months of the settlement, the banks focused on short sales to avoid home foreclosures and spent $19.5 billion, Bloomberg reported.

In addition, the banks had to agree to make overhauling changes in their loan services. According to Bloomberg, Smith said the banks are barred from pushing foreclosure when borrowers apply for loan modifications and new guidelines should prove validity of documents used to seize homes.

Recently the housing market is doing considerably better, with mortgage rates at an all-time low and boosting home purchases.  According to the National Association of Realtors, approximately 4.66 million houses were sold last year and that was the highest since 2007, reported Bloomberg.