Bank of America to Offer Borrowers Mortgage Relief
I would hope loads of people see this blog that have Bank of America mortgages. So many times we see the envelope and toss it away because we don't want to see what is inside. So, if you are a Bank of American mortgage holder--open the envelope please!
Bank of America to Offer Borrowers Mortgage Relief.
Are you in a select group of struggling mortgage borrowers are about to get an offer that sounds too good to be true? Bank of America will begin mailing 200,000 letters offering certain customers mortgage principal reduction so please open your mail from Bank of America to see if you have been selected.
“If people get these things and toss them, they won’t be eligible,” says a Bank of America executive charged with providing solutions to borrowers in need of mortgage assistance.
But the offer is real, and eligible borrowers could get as much as $150,000 knocked off the balance of their mortgages. It is all part of the $25 billion settlement reached this year between federal and state agencies and the nation’s five largest mortgage servicers over fraudulent foreclosure document processing (“robo-signing”).
Bank of America has indicated borrowers receiving the letters are eligible, but they still have to prove they qualify. In order to be eligible, a borrower must be 60 days late on the mortgage payment as of Jan. 31, 2012. The borrower has to owe more on the mortgage than the home is currently worth, commonly known as being “underwater” on the mortgage, and the borrower’s loan must either be owned by Bank of America or serviced by Bank of America for an investor who is allowing the modifications.
In order to qualify for the modification, the borrower must answer the letter with full documentation of income, showing that under the terms of the modification they can still make the monthly payment. A borrower with no income would therefore not qualify. A borrower’s current monthly payment must be more than 25 percent of gross income, and the borrower must show they are unable to afford that.
If the borrower qualifies, Bank of America will bring the monthly mortgage payment down to 25 percent of the borrower’s gross income. That could mean principal forgiveness well over $100,000, as there is no limit to the amount of the mortgage. If enough borrowers respond, it could cost Bank of America far more than it committed to in the settlement.Bank executives say that before choosing which borrowers will get the offer, they performed a net present value test on each loan, making sure that the principal reduction modification would net Bank of America or the investor who owns the loan more than foreclosing on the home. “It has to be fair to the investor as well,” says Sturzenegger.
Not all of the 200,000 borrowers who receive the letters are expected to respond.Some 6,500 letters should be arriving in mailboxes across the country this week, with a wave of new letters going out every week until the end of the summer, when all 200,000 should have been mailed. Bank of America is staggering the mailings in order to handle the expected response.
If your home loan is with Bank of America and you do not receive one of these notices or do not qualify for the program being offered, contact Michael Blue for a no obligation consultation to discover your options.
http://www.BlueSanDiegoHomes.com
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