I discussed the below article today on my radio show the "Real Estate
Pros" on WPSL AM 1590 out of Port St Lucie, Fl. You can view the show on my website. We discussed the reductions around 40 minutes into the show.
select group of struggling mortgage borrowers are about to get an offer
that sounds too good to be true. Executives at Bank of America say they
will begin mailing 200,000 letters offering certain customers mortgage
people get these things and toss them, they won’t be eligible,” says
Ron Sturzenegger, the Bank of America executive charged with providing
solutions to borrowers in need of mortgage assistance.
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 (so-called “robo-signing”).
of America, in a deal with state attorneys general and the U.S.
Department of Justice, committed $11 billion to mortgage principal
reduction, but executives say they will go beyond that if enough
borrowers respond to their offer. Five thousand borrowers have already
received a collective $700 million in principal reduction through a
pilot program for those already in a modification negotiation. The
200,000 borrowers being targeted now may have already exhausted
modification options or may have yet to contact the lender.
say 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.
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.
of questions raised by this! Too good to be true? Do you think the
people who will most benefit from this will respond? Will the process
just confuse people? Is it all too good to be true? Is it an attempt
by Bank of America to get good press and not appear to be the bad guy, for once?
What do you think?