Principal Reductions at Bank of America - Here's the Skinny

By
Real Estate Broker/Owner with Broadpoint Properties Cal BRE #01324959

Bank of America Offers Principal Reductions Up to $100,000 

bank of americaPerhaps you have heard about it on television, or read about it in the news. Bank of America is offering principal reductions of up to $100,000.

But, just like every advertisement, it is important to read the fine print. And, here are the details that you really need to know:

According to the Los Angeles Times, these principal reductions will be made on loans that were originated by Countrywide Financial and packaged into securities. Bank of America acquired Countrywide in 2008, along with their good and bad assets. 

According to Reuters, qualified borrowers are expected to receive principal reductions averaging over $100,000.  Those receiving the reductions will be over sixty days late on their payments and they may see their mortgage balance cut to their home’s current market value.

Click here to go to the Bank of America site and learn more about this program and how the principal reduction will be calculated. (Pay careful attention to the calculations; you may be surprised by what you see.)

Click here to find out if your loan (or your client’s loan) is eligible for the principal reduction.

If you take nothing else away from this article, remember this:

  • This is not for Fannie Mae or Freddie Mac loans. You and your loan must be eligible based on very specific requirements.
  • Only loans owned by Bank of America or private investors are eligible, and those include mortgages originated by Countrywide Financial Corp.
  • In order to qualify you must be 60 days delinquent as of January 31, 2012.

One final point.

According to Bank of America, 200,000 borrowers will be helped through this program. That averages out to 4000 per state. Right now, in San Diego County alone, we have over 35,000 borrowers in active foreclosure (with NODs on their property—who are more than 90 days late on their mortgages). 

So, while it sounds like it might be a good deal for some, please consider all of your foreclosure options, as not everyone will qualify for this program.

 

(photo credit)


 

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Re-Blogged 5 times:

Re-Blogged By Re-Blogged At
  1. Kim Carlson 480-993-9384 03/20/2012 01:20 AM
  2. Shannon Coe 03/20/2012 04:02 AM
  3. Scott Godzyk 03/20/2012 10:34 PM
  4. Gabe Sanders 03/25/2012 09:12 PM
  5. Bob & Leilani Souza 04/01/2012 05:22 AM
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Rainmaker
1,268,193
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Very important information you are passing on here, Melissa.  I've Suggested already!  But perhaps the most important portion of your post are the stats you give towards the bottom about the number of loans that are involved/available for assistance through this program of BofA.  And I always add ... being a mortgage lender myself, that should a homeowner need answers .. need assistance, that they get to a professional and knowledgeable lender SOMEWHERE ... to help and guide them.  Should they not be a good "fit" for this program you speak of, as you say ... another program may be available.  Homeowners should not give up .. ever.  Others options may be available now ... or become available in the future.

Thank you for passing this timely and important info on ...

Gene

Mar 20, 2012 01:16 AM #1
Rainmaker
292,727
Steve Davis
Davis Coastal Properties - Carlsbad, CA
Carlsbad CA

Hi Melissa - I read yesterday that part of the money the banks get to count as their "contribution" to the $25 billion settlement are short sale loses - which they would have had anyway. An UP TO $100,000 principle reduction may be of more real value - but 4,000 per state - what a joke. I think we all got scammed by the government and banks so that the banks could get out of their trouble with the illegal actions over the last 6 years - i.e. robo signing and forged documents - which should send ordinary citizens to jail.

Mar 20, 2012 01:16 AM #2
Rainer
424,207
Dan Hopper
Keller Williams Realty Downtown LLC - Denver, CO
Denver Realtor / Author / Advocate/Short Sale

Melissa, thanks for the posting... like all news of this type, the "the devil is in the details".  I would rather see this type of approach, principal reduction, versus the silly loan modifications!  The requirement of being late 60 days, is a shame in itself.  Why punish those that are current?  I do applaud BOA of trying something that they believe makes sense... what about the real crooks, FNMA and FreddieMAc... the ones we have bailed out many times over the last 12 years?  Yet, they have NOT paid back ONE DIME of those bail outs, and they have nothing in place to assist the tax payers. 

Mar 20, 2012 01:23 AM #3
Rainmaker
1,816,979
Ginny Gorman
RI Real Estate Services ~ 401-529-7849~ RI Waterfront Real Estate - North Kingstown, RI
Homes for Sale in Southern RI and beyond

Melissa, as i've commented before...you can't fit a square peg in a round hole most times...some will make it through others there are alternate routes to pursue...so important for homeowners to know this one...suggested too.

Mar 20, 2012 03:21 AM #4
Rainmaker
1,177,946
Jane Peters
Home Jane Realty - Los Angeles, CA
Los Angeles real estate concierge services

As usual, one must read the fine print before getting excited about the latest and greatest offer to help out there.  This is great information, as usual, Melissa.

Mar 20, 2012 05:36 AM #5
Rainmaker
593,168
William J. Archambault, Jr.
The Real Estate Investment Institute - Houston, TX

"In order to qualify you must be 60 days delinquent as of January 31, 2012."

Once again those honorable people that struggle to meet their oblations are screwed by those who could care less!

Bill

Mar 20, 2012 08:27 AM #6
Rainmaker
157,008
George Bennett
Inactive - Port Orford, OR
Inactive Principal Broker, GRI

I'll believe when I see proof positive that they done it. Personally, I don't like the deal. It gives away to much for too little benefit for the folks that were defrauded.

Mar 20, 2012 03:16 PM #7
Rainer
247,841
Doug Bullwinkel
Envoy Mortgage, NMLS 6666 - Roseville, CA
Mortgage Loan Originator NMLS #281609

There's no easy fix to the problem.  Only a few will benefit from this program and it won't even make a dent in the big picture. 

Mar 20, 2012 06:28 PM #8
Rainmaker
4,798,519
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Great info Melissa.  Let's see how long this lasts and if they comply with their guidelines.

Mar 20, 2012 08:37 PM #9
Rainmaker
1,182,695
Adrian Willanger
206 909-7536 AdrianWillanger-broker.com - Seattle, WA
Profit from my two decades of experience

Melissa, This is welcome news to those that have had originally financed with Countrywide, also, thanks for clarifying it's not for a Fannie or Freddie loans this is a real important distinction. I'll pass this article on, thanks.

 

 

Mar 20, 2012 10:46 PM #10
Rainmaker
346,025
Minna Reid
Killebrew & Company Realty, Inc. - Jacksonville, FL
Associate Broker

Thanks for posting the info - I checked out the link and it seems there's quite a few requirements included with that program.

It may help a few I guess...but no big dent in the big scheme of things.

Mar 20, 2012 11:30 PM #11
Rainmaker
2,191,320
Elizabeth Weintraub Sacramento Realtor Top 1%
RE/MAX Gold - Sacramento, CA
Put 40 years of experience to work for you

Very interesting, Melissa. The letter I am looking at from Bank of America does not mention the breakdown of principal balance forgiveness over the 3 to 5 years but it does talk about an adjustable interest rate with an unspecified cap. It's a little misleading that homeowners don't receive the full reduction immediately -- they have to prove themselves, and if anything goes wrong, oh, well.

Hey we talked to the same reporter yesterday for that upcoming article on short sales. I confirmed that you were a good source. :)

Mar 20, 2012 11:31 PM #12
Rainmaker
295,483
Terkel Sørensen
Real Estate Places - Temecula, CA
Realtor, 951.805.0773 , Bank owned and Short Sales

hi Melissa,

 

as always, this is good info, there is so much in the details.

Mar 21, 2012 12:50 AM #13
Rainmaker
1,342,185
Michelle Gibson
Hansen Real Estate Group Inc. - Wellington, FL
REALTOR

Melissa - A lot of folks don't read the fine print, they just hear $100K principal reduction. 

Mar 21, 2012 01:52 AM #14
Rainmaker
908,388
Pamela Seley
West Coast Realty Division - Murrieta, CA
Residential Real Estate Agent serving SW RivCo CA

Melissa, thanks for the heads up and pointing out the little details, such as it doesn't apply to Fannie Mae and Freddie Mac loans. That drastically limits the number of homeowners who could be helped. 

Mar 21, 2012 02:13 AM #15
Rainer
145,537
Gloria Commiso
Keller Williams - Hermosa Beach, CA
Hermosa Beach
Thanks for this information it's well written and informative,
Mar 23, 2012 12:31 AM #16
Rainmaker
1,304,722
Charles Stallions Property Manager
Charles Stallions Real Estate Services - Pace, FL
Pensacola, Pace & Gulf Breeze Property Management

Not sure banks getting into property management is a good thing but as in every mistake time will tell

Apr 01, 2012 05:42 AM #18
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