5 big banks have cut loan balances by $6.3B

By ALEX VEIGA

AP Real Estate Writer

LOS ANGELES (AP) – Five of the biggest U.S. banks cut struggling homeowners’ mortgage balances by $6.3 billion and provided a total $26.1 billion in relief under a landmark settlement over foreclosure abuses.

The monitor overseeing the $25 billion settlement says that the lenders provided the relief between March 1 and Sept. 30, to more than 300,000 borrowers.

In his second progress report, Joseph Smith discloses that $13.1 billion of the $26.1 billion in relief was in the form of short sales, in which lenders agree to accept less than what the seller owes on the mortgage.

Another $1.4 billion in relief was provided by refinancing home loans.

The settlement between the banks, the federal government and 49 states dates back to February.