A
legal settlement on 10/06/08 between California
Attorney General Jerry Brown and Countrywide parent Bank Of America, promises
an rescue plan for an estimated 125,000 California borrowers to cut $3.5 billion
in loan obligations.
This
program is eligible to borrowers who are:
| 1. |
In
default. |
| 2. |
Take
out pay-option adjustable-rate or subprime loans in which
the first payment was due between 1/1/04 and 12/31/07. |
| 3. |
Owner
occupied. |
| 4. |
Loan
amount is greater than 75% of the current home value. |
| 5. |
Borrower
must be able to afford payments under the terms of the modification.
|
Here's
the terms of the loan modification:
|
Loan
Type
|
Loan
Modification
|
| Pay
Option ARM Loans |
Borrowers
may be eligible to have their principal reduced to 95% of their home
current value and may be qualify for an interest-rate reduction or conversion
to an interest-only payment.
|
| Subprime
Adjustable-Rate Loans |
Borrowers
may be eligible to have their interest-rate reduce to the initial rate.
If the borrower still can not afford it, the borrower may be eligible
for further interest-rate reduction to as low as 3.5%.
|
| Subprime
Fixed-Rate Loans |
Borrowers
may be eligible for an interest-rate reductions.
|
Starting
December 1st, Bank Of America will begin reaching out to eligible borrowers
to freeze and lower interest rates, suspend foreclosures and waive late fees
for live-in homeowners.
;)
;)
