If you are a have a mortgage with B of A and are behind on payments and "underwater", you may be eligible. Don't toss away the letters you get from B of A, open them up and look for good news.
This offer is the real deal, eligible borrowers could get an average of $150,000 deducted from the balance of their mortgages. This program is part of a $26 billion settlement reached this year between government agencies and the nation's five largest mortgage servicer's over the processing of fraudulent foreclosure documents ("robo-signing".)
Bank of America has committed $11 billion for mortgage-principal reduction, but executives say they will go beyond that if enough borrowers respond to their offer.
5000 borrowers have already received a total of $700 million in principal reduction in a pilot program. There are 200,000 borrowers being targeted now that may have exhausted other modification options or may have yet to contact the lender.
Borrower's need to be 60 days late on the mortgage payment as of Jan. 31, 2012 to be eligible and owe more on the mortgage than the home is currently worth, and the loan must either be owned or serviced by Bank of America.
If one qualifies, Bank of America will take the monthly mortgage payment down to 25% of the borrower's gross income and there is no limit to the amount of the mortgage.
Not all of the 200,000 borrowers who receive the letters are expected to respond. Executives say there is a level of fatigue among delinquent borrowers who have already received several notices or who may have gone through a failed modification process already. Some borrowers simply don't want to stay in their homes, while others may think the offer is a scam.
Bank of America is sending about 6,500 letters this week by certified mail in hopes they will get opened and taken seriously, 200.000 letters will be sent by the end of summer. They are also halting foreclosure actions against these 200,000 borrowers until the process is complete.
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