Updated Monday, November 19, 2012 at 09:01 PM
About 7,000 Washington state borrowers have received more than $521 million in relief under the national mortgage settlement reached earlier this year with five major loan servicers, officials said Monday.
In February, Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial agreed to provide at least $25 billion in relief to underwater borrowers through mortgage modifications, principal reduction and other efforts.
The historic settlement targeted homeowners who owe more than their property is worth.
On Monday, the Office of Mortgage Settlement Oversight reported for the first time on the banks’ relief efforts at the state level. From March 1 through Sept. 30 in Washington, it said, the five servicers:
•Forgave about $308 million in balances on first and second mortgages to complete a short sale or take a property deed in lieu of foreclosure.
•Forgave nearly $109 million through either reducing the principal on second mortgages or extinguishing the entire balance.
•Saved 844 borrowers $49 million through refinances.
•Reduced principal by $49 million on first mortgages.
•Provided $6 million in other kinds of relief, such as moving money to those giving up their home in lieu of foreclosure, and donating foreclosed properties to disabled veterans.
Nationally, the banks reported they had granted relief to more than 300,000 borrowers, with the average borrower receiving $84,385 in relief.
In Washington, the average borrower reaped $74,076 in relief.
The settlement’s monitor, Joseph Smith, said the preliminary figures were “encouraging” but cautioned that his office hadn’t yet confirmed the data from the mortgage servicers.
Washington was one of the eight states that led the negotiations with the five banks, which faced years of litigation over alleged robo-signing of legal documents and other abuses in the foreclosure process.
“The settlement is doing exactly what was intended: providing loan modifications and refinances,” said State Attorney General Rob McKenna in a statement.
“Short-sale balances are being forgiven. Some borrowers receive lower principal amounts on their loans. It’s a new lease on life for people who really need it.”
Sanjay Bhatt: 206-464-3103 or firstname.lastname@example.org On Twitter @sbhatt