If you’re deep underwater on your Bank of America mortgage, B of A’s new principal reduction program might be just the lifeline you need to avoid foreclosure. Like many of the possible housing and/or mortgage fixes out there, it’s not for everyone. Homeowners considering a Phoenix short sale should look at this program as a possible solution. Could this new program be the solution to your mortgage problem?
How the Bank of America Principal Reduction Program Works
If you currently owe more than your home is worth, and your mortgage meets the parameters for the program, Bank of America might be willing to reduce the amount of principal owed on your mortgage loan over a 3-5 year period, if:
- Your loan is NOT backed by Fannie Mae, Freddie Mac, FHA, or VA (this could be a tough condition to meet; more than 70% of all mortgage loans are backed by these four mortgage giants)
- You were at least 60 days late on your mortgage payments on January 31, 2012
- Your mortgage loan was originated between 2005-2009
- Your loan fits into the “sub-prime” category, was issued by Countrywide Financial, or is owned by BofA or one of it's private investors.