BofA to Offer Principal Writedowns to 200K Delinquent Borrowers

Education & Training with Browning Real Estate School/REO Institute


By: Carrie Bay Printer Friendly View

Bank of America began mailing out more than 200,000 letters this week targeting borrowers thought to be eligible for principal-reducing modifications under terms of the recent settlement the company and four other servicers reached with the federal government and 49 state attorneys general.

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To be eligible, a homeowner must owe more on the mortgage than the property

 is worth today and must have been at least 60 days behind on payments on January 31, 2012.

In addition, the homeowner’s monthly housing costs must be more than 25 percent of gross household income, and the loan must be owned and serviced by Bank of America or serviced for another investor that has authorized the bank to grant principal writedowns.

Officials at Bank of America estimate average monthly savings of 30 percent for customers who qualify for the program

The North Carolina-based lender said Tuesday that it has already extended about 5,000 trial modification offers involving principal reductions since March, with a potential total of more than $700 million in forgiven mortgage debt. Homeowners are required to make at least three timely trial payments before the modification can be made permanent.

“Building on home retention and payment assistance programs already in place, we are meeting our obligation to deliver this additional relief to our customers following the completion of the recent global mortgage settlement,” said Ron Sturzenegger, Bank of America’s executive over legacy asset servicing.

“To the extent principal reduction and other modification tools help us turn mortgages headed for possible foreclosure into long-term performing loans, it will be positive for homeowners, mortgage investors, and communities,” Sturzenegger added.

The first letters of Bank of America’s mail blitz should start landing in mailboxes this week with the majority of the 200,000-plus identified candidates receiving notice by the third quarter of this year.

Bank of America has committed to slashing $11 billion in mortgage debt for struggling homeowners as part of the settlement agreement reached. But with BofA expecting an average principal reduction of $150,000 for each borrower, crude estimates put the tab potentially as high as $28 billion to $30 billion if a large majority of those targeted respond to the company’s outreach efforts and satisfy the qualifying criteria.

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James A. Browning MRE, CIPS, CDEI, REOCertified®, CEC, BPOR, ShortSaleCertified®, SFR

NAR, ABR, REBAC, CAR, CREOBA, REO Institute, National Speaker/Educator

CEO, Founder, REO Institute

Author, Best Selling: BPO & REO Simplified, "How to Work With Asset Managers"!

Office: 303-465-2889

Cell: 303-668-7053

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Re-Blogged 2 times:

Re-Blogged By Re-Blogged At
  1. Charles Stallions Real Estate Services 05/09/2012 01:14 PM
  2. Ray A. Lopez 05/09/2012 02:11 PM
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bofa to offer principal writedowns to 200k delinquent borrowers

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Charles Stallions Real Estate Services
Charles Stallions Real Estate Services Inc - Gulf Breeze, FL
Buyers Agent 800-309-3414 Pace and Gulf Breeze,Fl.

Just more smoke and mirrors while looking good with the fools that believe it. We have wasted more money with BOA as well as a few others. Fixing this mess is as simple as resetting the loans and stop the bailouts and other garbage. Last report had 3% of the bailout money going to actual folks while paying bonuses and limo drivers with the rest.

May 09, 2012 01:11 PM #1
David Shamansky
US Mortgages - David Shamansky - Highlands Ranch, CO
Creative, Aggressive & 560 FICO - OK, Colorado Mtg

I think this information is invaluable (if valid). I dont discount your pov I agree with Joyce that BofA is a joke and the whole thing is a mess. I am going to send some referrals to you as I get them frequently

May 09, 2012 01:19 PM #2
James A. Browning
Browning Real Estate School/REO Institute - International, IT
MRE REOCertified(R) SSCertified

B Of A, I am just the messenger!!

May 09, 2012 02:38 PM #3
Lauren Selinsky Broker CRS
California Coastal Estates - Aliso Viejo, CA
"Your California Real Estate Broker" TM #oclauren

Interesting.... So, is that their excuse for not approving short sales?

May 09, 2012 06:33 PM #4
D Hartwick
Where are the handouts for all of the prudent, responsible borrowers?
May 10, 2012 12:12 AM #5
Diane Kelly
Reward irresponsible borrowers and ignore those who pay on time . Everyone has lost money on their properties! Do an across the board mortgage reduction for everyone . Otherwise, forget it! Do you really think people who haven't made their payments in months (years) are suddenly going to start paying on time? Doubtful. What a complete waste of time!
May 10, 2012 01:38 AM #6
wafa innabi
Global brokerage - Rancho Cucamonga, CA

I been fighting BofA for the past 3 1/2 years now ,and I need help in asking this .DO OWNERS ON TITEL HAVE RIGHTS TO ASK FOR A NEW LOAN MOD EVEN IF THEY ARE NOT ON THE LOAN? bofa acted like these on title have no rights .DO JOINT OWNER HAVE ANY RIGHT TO FIGHT THE BANK ? Please note property in CA

May 10, 2012 03:00 AM #7

If my Note is with BoA and it is being serviced by Select Portofolio am I able to apply for the principal reduction?sunchoke

May 10, 2012 05:31 AM #8
James A. Browning
Browning Real Estate School/REO Institute - International, IT
MRE REOCertified(R) SSCertified

Diane, I am from the old school, if you dig fast enough, you may bury your own soul. James

May 10, 2012 07:31 AM #9
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