Five Big Banks Cut Loan Balances By $1.3-Billion

Five of the biggest U.S. lenders have reduced struggling homeowners' mortgage balances by $1.3 billion and provided a total $10.6 billion in relief under a landmark settlement over foreclosure abuses.

The monitor overseeing the $25 billion settlement says the banks provided the relief in the first four months of the three-year program. In his first progress report, Joseph Smith Jr. discloses that $8.7 billion of the $10.6 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.

Bank of America Corp., which is required by the settlement to provide the largest portion of the relief, $8.6 billion, hadn't completed any modifications of first-lien mortgages or refinancings as of June 30, according to the report.

(Copyright 2012 by The Associated Press.  All Rights Reserved.)