Mortgage balances cut by $6.3 billion, banks say

LOS ANGELES – Five of the biggest U.S. banks have cut struggling homeowners’ mortgage balances by $6.3 billion, part of a total $26.1 billion in home loan relief provided under a landmark settlement over foreclosure abuses.

More than 309,000 borrowers received some form of mortgage relief between March 1 and Sept. 30, according to a report issued Monday by Joseph Smith, monitor of the settlement.

That translates to roughly $84,385 per homeowner, according to the report, which is based on mortgage servicers’ own account of their progress as they move to comply with the settlement terms.

“The relief the banks have reported is encouraging,” Smith said in a statement. He added that the banks won’t get credit under the settlement until he can confirm their figures.

Smith said 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 37,396 home loans with an average principal balance of $210,398. As a result, each borrower will save about $409 in interest payments each month, according to the report.

Banks also had $4.2 billion worth of loans under trial modifications. That could lead to permanent reduction in loan balances of $135,223 per borrower.

All told, banks erased about $2.6 billion in first-lien loans and $2.8 billion in second-lien loans. That amounts to an average reduction of $116,929 for the 21,833 borrowers with first-lien loans. The 50,025 borrowers with second-lien loans saw their balances reduced by an average of $55,534.

The federal government and state attorneys general for 49 states forged the $25 billion settlement in February with five banks: Ally Financial Inc., Bank of America Corp., JPMorgan Chase & Co., Citigroup Inc. and Wells Fargo & Co.

Credit card debt rises in third quarter

LOS ANGELES – Americans cranked up their use of credit cards in the third quarter, racking up more debt than a year ago, while also being less diligent about making payments on time, an analysis of consumer-credit data shows.

The average credit card debt per borrower in the U.S. grew 4.9 percent in the July-to-September period from a year earlier to $4,996, credit reporting agency TransUnion said Monday.

At the same time, the rate of credit card payments at least 90 days overdue hit 0.75 percent, up from 0.71 percent in the third quarter of last year, the firm said.

While higher, the late payment rate is rising from historically low levels. The lowest late payment rate on TransUnion records going back to the mid-1990s was 0.56 percent, set in the third quarter of 1994. More recently, it was at 0.60 percent in the second quarter of last year.

Disney Movies Online will close Dec. 31

LOS ANGELES – The Walt Disney Co. is shutting down its Web movie service, Disney Movies Online, saying the site wasn’t keeping up with user demands.

In an email to users, the company said the site would be closed as of Dec. 31.

The site allowed visitors to buy and rent movies from the Disney library, including films made by its subsidiary Pixar. It also allowed people who purchased physical discs to stream the movies from the website.

Disney did not announce when its expected replacement service, Disney Movies Anywhere, would be launched.