–Fannie/Freddie Loans Not Eligible For Bank of America Program
WASHINGTON (MNI) – Bank of America Home Loans Tuesday said they are
starting to reach out to customers who are eligible for principal
reductions under the national mortgage settlement between state attorney
generals and mortgage servicers.
“The first letters in a targeted outreach to more than 200,000
potential candidates for this assistance are arriving in homes this
week; most of the letters will be mailed by the third quarter of this
year,” Bank of America said.
The bank said borrowers will realize an average monthly savings of
30% as a result of the principal forgiveness and have actually already
mailed out a number of offerings to borrowers who were already in the
modification review process.
“Under the terms of the government settlement, the bank will strive
to provide an affordable payment to qualified under-water homeowners by
first reducing the principal balance to as low as 100 percent of the
current property value, then lowering the interest rate and forbearing
additional principal, as necessary, to reach the target payment,” the
bank said.
“The settlement terms require a final calculation to determine that
the cost incurred by the mortgage investor to modify the loan does not
exceed the expected loss to the investor if it goes to foreclosure
instead, commonly known as positive net present value,” it added.
GSE loans will not be eligible for principal reduction under
the program but Bank of America said there are other programs available
for those borrowers that could provide a similar reduction in monthly
payments.
** MNI Washington Bureau: 202-371-2121 **
[TOPICS: M$U$$$,MAUDS$]
