Bank of America Starts Mortgage Reduction Effort
Bank of America said it planned to contact more than 200,000 homeowners who could be candidates for the offers, sending letters to a majority of them by the third quarter of this year. Which to you and me means around summer time.
That's the good part.
To be eligible for the principal reductions, homeowners will have to meet certain criteria, including: having a loan owned or serviced by Bank of America; owing more on the mortgage than their property is worth, and being at least 60 days behind on payments as of the end of January. That's where the snag appears.
The bank said it had started making such offers in March to a narrower group of homeowners, those who were already in the process of seeking mortgage modification. The bank estimated that the earlier wave of trial reduction offers to about 5,000 people could amount to more than $700 million in forgiven principal. But homeowners have to make at least three timely payments for the reductions to become permanent.
So, if you have a Bank of America loan, and you are upside down, maybe make a phone call or two.
An interesting side note, Bank of America appeared on the Fortune 500 at number 5. Wonder if they are trying to earn some good Karma?