Who Qualifies, Who Doesn’t For Bank of America’s Expanded Mortgage Settlement

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As part of the $25 billion mortgage fraud settlement, Bank of America confirmed today that it is extending its pledge to help struggling borrowers stay in their homes and stabilize the housing market.

BofA issued this statement:

“On loans Bank of America owns or services on behalf of some private investors who own Countrywide-originated mortgage loans, we will actively contact more than 200,000 borrowers potentially eligible for the program, defer foreclosure sales for those borrowers until solicitation is complete and may forgive principal down to the current value of the eligible borrower’s home.”

Of course, there is something in it for the bank. By making this side agreement to the main settlement announced Feb. 9, BofA could avoid up to $850 million in penalties.

Before you start thinking you’re a shoe-in for a change in the terms of your mortgage, check out these specific parameters:

  • Mortgages must be 60 or more days delinquent on Jan. 31, 2012.
  • Monthly mortgage costs that are more than 25 percent of monthly income.
  • Home must be worth less than the unpaid balance on the mortgage.
  • First-lien mortgage loan needs to be owned by Bank of America or serviced for others who have given the bank the right to reduce principal if necessary on troubled loans.
  • Fannie Mae, Freddie Mac, FHA and VA mortgages not eligible.

More information can be obtained by calling 877-488-7814.

It is likely a lot of struggling homeowners will still be left out, especially since Fannie Mae, Freddie Mac, FHA and VA mortgages don’t count. And it’s going to be tough for homeowners to sort out on their own if their mortgage is owned by an investor that’s given its blessing to the program.

If you’re feeling left out, do you think the bank should be doing something for you?

Check out my blog post from earlier today here.

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18 thoughts on “Who Qualifies, Who Doesn’t For Bank of America’s Expanded Mortgage Settlement

  1. Michelle Eaton

    I am within days of signing closing documents for a short sale which was approved by Bank of America. If I was eligible for a principal reduction under the new settlement I could afford to keep my home. Also if I were
    givin the short sale price the bank has approved for a stanger I could most certianly afford to keep my home. When I call B of A to inquire about the settlement I have been told numerous times the settlement is not approved by the courts and the programs are not availible. I am told they have no idea when the programs will be availible. I would hate to loose my home to a short sale if it was going to be possible to get a principal reduction. I do fit the requirements you mentioned above and my investor has giving the right to principal reduction. The short sale approval from
    B of A requires I close escrow by 3-20-12. I am wondering what I should do regarding the short sale? I have called B of A to find out if they are going to postpone foreclosure sale dates until the programs are availible and they said no foreclosure dates will be postponed.

    1. Daniel Smith

      I want you to know that BOA is in fact already using the new money. My documentation is dated March 13th. I had been working with them for months. They have placed me in the new program agreed upon with the Federal Government. Prior to the agreement with the Gov they were looking to do the mod in-house.

      My modification is dropping my mortgage payment by about $900.00. That’s great. They also are reducing my principle by $130,000 and some change. Amazing. My house was purchased for 285k in 2006. I was a CountryWide Customer.

  2. donald

    Looks like some of us who do the right thing get screwed again! I’ve been working 60-70 hours per week to earn extra income to pay down my Bank of America (Countrywide) mortgage. Even making extra principal payments. So now that my mortgage is less than the market value, I get screwed because I make my payments.

    People who knew they could not afford their mortgages, get rewarded.

    Yes, there are some people who were actually victims of the institutional mortgage greed. Many of these people, several whom I know, are still making their payments on time; even though their homes are underwater on the mortgage. But, these people do not qualify either.

    Try to do the right thing and you loose. Great system. While the dishonest people at the mortgage companies do not get penalized or have to return any of their ill-gotten gains.

    1. lisa

      Donald, true there are folks that really were screwed. Then again, there are people like the family of 7 living next to us who admitted to us right off the bat they didn’t plan to make payments. They are on the second pre-foreclosure on same mortgage since 2008. They still owe what they paid four years ago. In fact they brag that Obama will give them their house (no, this is not a joke or slam). So we work our butts off to pay our bills while those lazy SOBs (not employed, never have been) sit in the driveway and watch the rest of us come and go to our jobs.

    2. Gerry

      I feel your pain. we have been paying on time every month and I have been calling our Mortgage Company which is Sun Trust but BOA is the investor on our loan. They will admit and I even got an officer of the company say that you would have to miss several months of payment before they would entertain a loan modification application. Yeah – seems like us law abiding, conscientious people always get the short end of the stick.

  3. Chris

    Here are a few basic ideas. As the settlement between BOA and the state AGs has already been agreed to by the parties, BOA has clearly already expressed its intent to benefit parties in a position such as yours. At the very least I would advise filing for a continuance (JD-CV-21 Rev. 10-10) based on the fact that right now, at this very moment, BAC has created for you the homeowner the contractual right to a principal renegotiation. Notably, as opposed to other aid programs BOA may have entered into, enrollment of qualifying homeowners here is mandatory as BAC has received something of value in return for striking this agreement(removal of fines). Deceitful attempts to deny you the full value of the negotiated settlement by using petty delay tactics are not acceptable. Further, I would immediately contact BAC and inform them on the record that their reasoning for non-compliance is not good enough and unless they enroll you in the program that was negotiated for you plan to sue them under CUTPA (Connecticut Unfair Trade Practices Act) for knowingly violating the agreement negotiated for your benefit. Finally, I would indeed file suit if this releif is not granted. Very likely either the judge reviewing the continuance, the pre-foreclosure administration, or the responding BOA defendant legal team is going to eventually see you are in the right.

  4. Chris

    Also, in my above blurb, I point out the steps that I do merely to illustrate what remedies are available, not to suggest that they are absolutely the right way to go in this case. I by no means intend to indicate that the homeowner has not considered some of them already.

  5. Chris

    I might as well just admit it. I do have an opinion. As an Attorney involved in this field of law it is frustrating to see what little releif is negotiated for on behalf of homeowners made inaccessible in all practicality through the administration of the policy. Further the question needs to be asked, what about all of the already foreclosed upon homeowners? If this deal is built upon the assumption (and many have challenged this assumption but nevertheless) that all qualifying homeowners are deserving of releif, what makes the already foreclosed upon less deserving? In fact, as Donald correctly pointed out above, what makes those who dont have homes that are “underwater” less deserving? The reality is that even given the way banks have agreed to define who is “deserving” it appears there is a substantial sum of money that still needs to be doled out, above and beyond even the large amount named in this particular settlement. This settlement is a modest beginning, but its nice to see it nevertheless.

    1. Kenneth R. Gosselin Post author

      Some legislators in Connecticut, while praising the settlement as a good start, have publicly criticized what is being done for people who have already lost their homes. They have said a $1,500 payment is paltry compared with what the borrowers were put through: getting a different person on the line every time; forced to send multiple sets of documents; not hearing anything for weeks, etc.
      What do you think of the payment?

  6. Sue

    This is an outlandish way of the banks being bailed out yet again. As a Florida Homeowner, I have been turned down by Bank of America multiple times including a nervous disorder since birth. Mortgage foreclosure of a known attorney in Florida already having been fined produced robo-signed documents in my foreclosure. However, one weapon for homeowners in foreclosure in Florida is file responses on your summons, defense and final judgement. Denied Denied Denied! Multiple robo-signers on my documents. I have written and supplied multiple documents and exhibits to both the Florida State Attorney General and Florida Bar filing complaints. In fact it is still an on-going issue being investigated. Yet no slap on the hand to the attorney who filed in my case. Easily look in the Orange County Clerk of Court Records and Orange County Comptrollers Office on how to figure it out on your own. No attorney necessary – figure out your own mortgage fraud.

    Learning if the attorneys can file docs on behalf of DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE ON BEHALF OF HSI ASSET SECURITIZATION CORPORATION TRUST 2006 HE-2 with robo-signed documents they better have the backing to prove it in court one day. If Deutsch Bank really owns my home with a securitized trust that opened and closed in 2006 yet the Assignment of Mortgage was filed on their behalf on 2010 – is that not fraud. And better yet how is it that MERS was involved in a chain of events transfering our note from Flagstar, to Countrywide and then Bank of America.

    In my research the servicer, in my case BOA cannot sue for foreclosure only the note holder. When I wrote to BOA for original docs…they actually mailed me docs that are copied and faxed from Flagstar to Countrywide in 2005. No joke either. True facts here.

    From one now very educated homeowner in Florida – a little research will shock you. Look on your latest Assignment of Mortgage on Orange County Comptrollers Office. Check out to be sure the folks who signed the documents are in fact in Florida, have a true notary seal and are they really “executives” for who they sign for on legal documents.

    Florida Homeowners start doing some research of your own. It is shocking at first but keep writing and keep fighting. If a new Assignment of Mortgage was filed after the date of the Lis Pendens – that is another red flag just to start the ball rolling.

  7. roy

    i only have a second mortgage at bofa that used to be a countrywide loan
    my second is$160 ooo
    i owe $179 ooo on my first at another bank

    bofa gave me the bull shit promise of 3 payment promise and loan mod would be approved
    that was in 2009 or 2010
    i have not paid them
    they war dial me every day
    i some times call them to ask loan modthey promised me and the ask me to make 3 patments again, i tell th no because they lied to me then i hang up on them
    they are idiots and i cant believe they are still open fir business. they are soooo full of shit
    and ashamed our gov does not care about what they are soing
    so many promises and bullshit loan mod programs
    and all i see are blogs and articles like this

    lawsuits class action bs
    lawyers advertising they can help
    then they recomend i call their real estate agent “friend” or am investor that will “help” me do a short sale lol

    i would never work with anyone that also just happens to have a short sale all planed out for me before they attempt to help me keep my home

    i see a lot of this type of senario
    because i also happen to be a realtor

    yes i do short sales but only after my clients ask me to do a short sale

    a few told me that they paid their attorney for a loan mod that did not get approved
    then the attorney or loan mod company refered them to a reltor or investor and told my clients the few thousand they paid for the loan mod would be credited to them getting a short sale approval
    fyi. in the real world a realtor can get a loan mod fir free

    so what im saying is dont pay an attorney

  8. Rusty Pagnetti

    I initially had a mortgage with Country Wide, Biggest losers going! I now have BOA My homes is underwater, but
    I never miss a payment, always pay on time.
    What’s in it for Me?

  9. tlc

    just talk to boa they said you have to wait 60 to get a letter first than i called back to find out its a waiting game nobody at877-488-7814 will give you help at all. there answer is wait my house is under water to never miss a payment and was told we meet the the requirement

  10. Pete

    I have been waiting for BofA to offer me the interest rate relief program from the mortgage settlement. I was told several times to keep making my payments that I qualified for the program and I would be contacted by mail regarding the modification. I called today and was told I wouldn’t get the program because this past December the investor of my loan is not participating. I don’t fit into a hardship and I have never missed a payment. I don’t qualify for harp, hamp because I am not owned by fannie. I have an arm that is up in 3 years, what do I do, stop paying my mortgage?

    1. Nette

      Pete… your story sounds like ours with BofA.
      I was under the impression that they owned and serviced our loan. I,too, got the run around since last June on their # 877-488-7814. We were told we would be notified in 60-90 days by mail.
      I have called repeatedly. On 1/7/2013 they told me they didn’t own the loan… so we DO NOT qualify for their interest rate relief program.
      Supposedly they are going to mail me the information regarding the owner of our loan.

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