Five of the biggest U.S. lenders have provided $10.6 billion in relief under a landmark settlement over foreclosure abuses, including reducing struggling homeowners’ loan balances by $1.3 billion.

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. disclosed Wednesday 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.

Lenders are increasingly favoring short sales rather than waiting for troubled loans to go through the foreclosure process.

In Michigan, according to the report, homeowners have received $185 million in all types of relief so far, covering 4,355 cases. That includes 1,805 short sales that averaged savings of $68,950 per homeowner.

Michigan residents are expected to receive about $785 million in benefits from the settlement, including a $97.2 million direct cash payment to the state. That money arrived on Aug. 16 and will be allocated to finance investigations of mortgage fraud, clean up blighted properties, refund up to $3,000 to victims of foreclosure rescue scams, foreclosure counseling for homeowners and other assistance.

Those efforts are still being established, said Joy Yearout, spokeswoman for state Attorney General Bill Schuette. The Attorney General’s Office hasn’t received complaints from homeowners, she added. The office is reviewing the monitor’s report.

“It’s too early to say if we’re satisfied with the level of progress,” Yearout said.