For at least 300,000 people who were at risk of foreclosure, relief has finally come. But tens of thousands more still waiting, some not very patiently, for their mortgage lenders to pay up. You may recall that five major U.S. banks agreed to settle federal charges of mishandling foreclosures by providing billions of dollars of debt relief and refinancing. A progress report from the official overseeing the payback shows that Bank of America has refinanced $890 million in loans so far. J.P. Morgan Chase has spent $903 million. In total, since August, customer relief payments have totaled at least $22 billion.

The Campaign for a Fair Settlement, a coalition of consumer, housing and financial reform groups, is not impressed. Back in August, about 28,000 homeowners were in the process of refinancing. As of September, the number had crept up to about 31,000. The Campaign says that is not enough progress. The settlement requires the banks to reduce mortgage balances or refinance homes that are now worth less than the value of the note. Other banks involved in the payback include Wells Fargo, with $2.5 billion in relief provided so far, Citigroup with $1.1 billion, and Ally Financial, with $588 million. Bank of American swallowed up Countrywide Mortgage and assumed $11.8 billion of the company’s liabilities

The banks have three years to make good on their obligations under the settlement, and if they don’t a penalty of no less than 125 percent of its unmet commitment has to be paid. Watchdogs like the Campaign for a Fair Settlement are worried that low income and minority borrowers are not being taken care of properly. Those homeowners, called “subprime borrowers” because of low credit scores and other problems with their finances, were hardest hit. Banks are not required to report the race and income of their clients.

Foreclosed homeowners should understand that the banks are not terribly happy about having to do all of this refinancing, even though the cost will barely dent their profit margins. When your turn comes, don’t go into negotiations alone. Get advice and assistance on making the best deal possible because a chance like this will probably never come again, at least if the banking industry has anything to say about it.

Source: Thomson Reuters, “Big U.S. banks give $22 billion under mortgage relief deal,” Rick Rothacker, Nov. 19, 2012