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