It an estimated there are currently 2 million mortgage holders that are delinquent on their payments, and of those 2 million, 1 million hold their loans with Bank Of America, and 200,000 of those 1 million, may have won the lottery, of sorts.Â
Letters are being sent to borrows explainingÂ they could have $150,000 knocked off their principal loan amount if they qualify under a new program. There will be no customer service phone call explaining the program, just a letter in the mail that many people may not open, not read, or think it is a scam.
It is real and it is part of the $25 billion settlement reached earlier this year between the feds and the nation's five largest mortgage servicers over fraudulent foreclosure document process, also known as robo-signing.
The letters are being sent to borrowers who are eligible but they still have to prove they qualify. In order to qualify they must be 60 days late on mortgage payments as of Jan 31, 2012, and the mortgage must be "underwater", meaning they owe more than the home is worth.Â
In order to qualify for the modification the borrow must show they will be able to make the new monthly payment, therefore a borrower without a job would 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.
If the borrower qualifies, Bank of America will bring down the monthly payment to 25% of the borrower's gross income, which could mean principal reduction of over $100,000 as there is no limit on the amount of the mortgage.
Get the word out folks! This program is for real!
Bank of America is also offering higher amounts on their relocation assistance packages on short sales. In order to qualify you must not currently have an offer on your home that is underwater and going through the short sale process. If you know of anyone considering a short sale, now may be the time to act and take advantage of this additional assistance. Also, the programs now inÂ place forgiving the debt without tax implications expires at the end of this year and only time will tell if they will be renewed by the Federal government.Â
Michele "K", Realtor CDPE
Coldwell Banker Coastal Alliance