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Jeri Creson's Blog

By Jeri Creson | Broker in Studio City, CA

Bank of America Loan Modifications with Principal Reductions

The long awaited principal reduction loan modifcations are not - I repeat - are not merely a rumor, nor a pie in the sky, it can't happen to me kind of reality.   I'm happy to say that one of my clients was amongst the first to receive a significant ($170,000) principal reduction offer on his B of A loan modification.   

This particular client has been in loss mitigation for over two years.   He has not made a single payment in two years, until today, when he made his first trial period modification payment.   He has been turned down for B of A Modifications three times, and we were standing by, in case this modification attempt failed, ready to do a short sale.   And the letter finally came.   

So, it would seem that the tides are turning.   The recovery process has been painfully slow, and many may say, "too little, too late" for the millions of Americans who have lost their homes already.  And those people would be right.   But we are here - how we got here is a lesson at best, but what we do going forward will determine both the length and scope of the final toll of this heinous financial crisis.   

Today, I attended one of Bank of America's large-scale Short Sale Forums - mini-seminars currently being held across the country which outline their new short sale policies and procedures.  We were given new tools and "insider access"  for escalation of short sale issues (limited to forum participants only), and taken, step by step through the new programs, requirements and processes.   The idea is to reduce the vast majority of short sales from 3-6 months down to 30 days from application to a pre-approved price and terms agreed to by the investor so that a "normal" sale can take place from that point forward.    They have instituted some very good new policies and procedures.  The system isn't perfect, and they will, undoubtedly, continue to make tweeks and changes as they go forward, but I do have to applaud B of A for taking a leadership role in their approach to improving the short sale process.   This level of bank/agent communication...having real tools in place to handle the inevitable problems and find a path to resolution inherent in short sales has been a long time in the making, and we, as both agents and consumers are hoping to be seeing a little light at the end of the tunnel. 

Let's all collectively hope that this new light isn't actually an oncoming train!

Amen -

Comments

By Edyta Gryc - Broker Associate,  Thu Mar 29 2012, 18:32
Congrats to your client for a successful loan modification with a principal reduction.WOW!
By Muriel Levin (323) 363-9140,  Thu Mar 29 2012, 19:03
This is amazing , congratulations to you and to your client, who has been fighting for years to get this done.
Wachovia had very good guidelines too. I think they lead the way to such events as we are seeing now in the short sale activity and resolution. I have to give credit to people like your clients who have to write and rewrite numerous amount of time the same information, again and again, resending it time after time to the lender and not giving up their hope that they will keep their home. You need resiliency to carry on like that for years!
Your client must feel as if he won't the longest race and his reward is to be able to keep his home. Impressive!
Muriel Levin
REO and Short Sale Specialist
By Samemothernature,  Tue May 22 2012, 23:52
Isn't this unfair for everybody else? Not only those whom already foreclosed. But those whom spend very carefully to pay all their bills and taxes. Now their tax goes to pay other's bill? Rewarding those who spend and spend or buy and buy? Not just UNFAIR, This kind of action will only result more bad things happen. Let the supply and demand rule of mother nature take place. Government can't fight with the nature. It will only prolong the pain. Stop using the hard working tax $ to fright the nature. We can only get hurt more.

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