Banks say they have given Florida homeowners $8.6 billion in relief, more than they agreed to as part of a nationwide "robo-signing" settlement — but they're not off the hook just yet.
That's because data on their payouts over the last year, released Tuesday, have yet to be reviewed by someone independent of the banks.
And much of the relief they've reported to fulfill their end of the settlement has yet to be weighted according to settlement formulas, and will likely net them credit for only pennies on the dollar.
Florida Attorney General Pam Bondi, one of 49 attorneys general across the country to negotiate the settlement, said in a statement Tuesday that the banks have given "significantly more" than the $8.4 billion banks agreed to pay in Florida.
But without weighting the relief according to the formulas, it's impossible to say how close banks have come to fulfilling their end of the deal. Principal reductions, for instance, give banks dollar-for-dollar credit, while second-mortgage forgiveness count for only 10 cents on the dollar.
A preliminary report said the 112,000 Florida homeowners offered relief so far have been given an average savings of more than $77,000. About a fifth of the relief, or more than $1.7 billion, has been spent toward forgiving or refinancing troubled mortgage principals that would keep homeowners in their homes.
More than 75 percent of the $8.6 billion, however, has gone toward what consumer advocates say are less helpful avenues: forgiving home-equity loan debt that banks likely would have never collected, and approving short sales that likely would have happened anyway.
Banks have largely begun approving short sales because they cost the bank less than a foreclosure. And a forgiven home-equity loan, or second mortgage, does nothing to keep homeowners in their homes if their first mortgages remain distressed.
Five of the nation's biggest banks — Ally Financial, Bank of America, Citigroup, JPMorgan Chase and Wells Fargo — agreed last year to the $25 billion settlement to resolve claims that they were blasting out improper filings to speed up foreclosures.
The settlement's independent monitor will submit to the courts next month his first reports on how banks have complied.
In a statement, Bondi said she would "continue to hold the banks accountable by demanding full compliance with the settlement." Floridians have filed more than 500 complaints regarding issues with the settlement, data show.
Earlier this month, New York's attorney general said he planned to sue Bank of America and Wells Fargo for breaching terms of the settlement outlining how banks handle requests from homeowners trying to modify mortgages.
Drew Harwell can be reached at [email protected] or (727) 893-8252.