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.