Bank of America announced today that it will introduce “principal forgiveness” program designed to help some troubled mortgage borrowers relief from the possibility of foreclosure. The program will look to reduce loan balances of qualifying distressed homeowners with adjustable rate mortgages or subprime loans in an effort to make their payments more affordable. The homeowners must be at least 60 days delinquent on their loans and owe more than 120 percent of their homes’ value.
This is all well and good, and a huge relief for many. But sometimes I have to wonder if this is just a lot of PR hoopla. Bank of America estimates that about 45,000 customers will qualify for its plan. So based on BofA’s past performance, maybe half will actually succeed. Banks keep throwing out these great plans but don’t have the infrastructure in place (can I say short sales?) to support these plans. A client of mine has tried to get through to BofA in the past to discuss loan modification and after being on the phone for 90 minutes and transferred numerous times, were told they don’t actually qualify. Shouldn’t it be easier than that?
So, Bank of America, if you are listening, I hope you hold true to your plan. You have the ability to help so many troubled borrowers, don’t let them down!
Click here to read the original article from AP: “BofA to Start Reducing Mortgage Principle.”