Bank of America announced that they are creating a new loan balance reduction program has created a bit of a stir in the news today. However, before you go racing down to your local branch looking for relief, there are a few things you need to know.
Key Points of the Bank of America Announces Loan Balance Reduction Program:
- The loan reduction program is invitation only. That means that you can not ask for it, they will tell you if you are invited to get relief.
- If you got your loan from Bank of America, don’t expect any help. This program is aimed at the Countrywide borrowers who most likely were written a mortgage that regulators are looking at sceptically.
- The write down amount caps out at 30 percent.
- You have to remain current over a 5 year period to get the benefit of the Bank of America loan balance relief program.
- This program is only for those who are in immediate fear of losing their house and can not afford their payments.
So if you have made all your payments and are in a good solid 30 year loan but are upside down on your mortgage, the Bank of America loan relief program is not for you. You just have done everything right and will suffer.
However, if you placed a big bet and took out an interest only or subprime loan with Countrywide for a home you could not afford at the time and that loan is underwater right now and you are behind on your payments, you may see some significant relief with this loan modification program.
This is a great program to get those who are in trouble out of of the woods. The only thing I wish is that it rewarded those who did things right, not only those who took huge risks.
The program is aimed at borrowers who received subprime or other high-risk loans from Countrywide Financial, the biggest and one of the most aggressive lenders during the housing boom. Bank of America bought Countrywide in 2008.
Bank of America officials said the maximum reduction would be 30 percent of the value of the loan. They said the program would work this way: A borrower might owe, say, $250,000 on a house whose value has fallen to $200,000. Fifty thousand dollars of that balance would be moved into a special interest-free account.
As long as the owner continued to make payments on the $200,000, $10,000 in the special account would be forgiven each year until either the balance was zero or the housing market had recovered and the borrower once again had positive equity.
“Modifications are better than foreclosure,” Jack Schakett, a Bank of America executive, said in a media briefing. “The time has come to test this kind of program.”
That was the original notion behind the government’s own modification program, which was intended to help millions of borrowers. It has actually resulted in permanently modified loans for fewer than 200,000 homeowners. via The New York Times
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Hate to see people who purposely made bad decisions let off the hook but I understand that the greater good may be served.
Did you ever think people were misled? Heck with bad decisions everybody isn't educated about Real Est. and or mortgages as others. So sad but true that is why we hire Real Estate agents but when they are trying to make a buck off of someone whom isn't knowledgeable or a first time home buyer and they do not disclose the in's and out's and the rights and wrongs what do you expect besides commission.. and an underwater mortgage.
All upside down mortgage need to be reduced!! We are all victims of the mortgage crisis and many upside down loans are NOT subprime. Values in California, Arizona and Florida have been stripped of equity due to the big melt down. When you are underwater over 100,000 you can't recover. As of to date an estimated 1.2 TRILLION dollars in mortgages are UPSIDE DOWN. Unless something AGRESSIVE happens this will continue to burden homeowners for years to come! If you were over 50 and are now facing huge losses of equity how will you ever recover. Unfortunately the only answer to this is foreclosure and bankruptcy. Sad but true!
Actually, whether your behind or current on your payments, there is help! Aslong as your upside down, the help is actually 100% GUARANTEED. 97% of mortgages issued between 2001-2008 include some type of fruad. Its all over the news, but you can bring that principal down to market value or less! Call today! 248-996-0346 for more information and a free consultation.
Where? It is a CLUSTER.
There are companies out there that will do a principal reduction using an outside investores. After all aren't our loans from outside investores anyways? Most of the time the banks are only the servicer to these loans not the lender themselves. I have done research and found a company that does principal reductions that reduce your loan to currant market value or sometimes better. The great thing about these reductions is the they only reduce your note and nothing ever leaves your ownership. These are not loan modifications either they are real reductions of your note. There are stipulations and qualifications you muct meet but they are simply that you must be 125% upside down and you must be able to proove you can afford the new note if they do this for you. I am very inpressed with this company and another thing is your credit has nothing to do with it. YOu already have your loan so you dont need to qualify for another since they are only reducing the note, you should check into it before you give up. Her is the name of a company that works with them, call and see what they can do for you, it can't hurt.
Fair VIew & Associates LLC 480-263-9603
I'm 63 and have always done things "right," including my loan which is now upside down. Of course not to the extent to qualify for anything. I am forced to stay in an area that has gone downhill in a major way and am sometimes concerned for my safety. Bail out the banks and car dealers for overextending themselves, but not the people that "do things right." Makes sense.
I have a mortgage of $458.00 and the prize of my home is $328.00.What can I do?
I was victim of mortgage fraud by a person who was working representing Freemont Investment,which disapeared few years ago,letting people in troubles. Is there any available help. People watch out that person is still in business, his name is Jose De La Rosa.
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