Bank of America Principal Forgiveness Program...How To Get $150k Knocked Off Your Loan
As reported several months ago Bank of America has introduced the Nation's first (potentially significant) Principal Forgiveness Program.
Underwater qualifying homeowners could see monthly savings of up to 35 percent on mortgage payments, with principal balances cut by an average of $150,000 according to New York Times reports.
The program forms part of a $25 billion settlement agreement earlier this year with 49 state attorneys general and other federal authorities.
Who qualifies?
The bank 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.
Put this into perspective. This Bank of America program is being offered to 200,000 underwater owners. For those 200,000 owners this program will offer potentially home saving relief. However, this just barely scratches the surface. According to recent reports there are currently 6,000,000 borrowers in some form of default. Underwater mortgages amount to around 11,000,000 homeowners.
To be eligible for the principal reductions, however, homeowners will have to meet certain rules:
1) having a loan owned or serviced by Bank of America
2) owing more on the mortgage than their property is worth
3) being at least 60 days behind on payments as of the end of January.
4) homeowners have to make at least three timely payments for the reductions to become permanent.
Will this program make a difference?
The housing sector, whose demise threw the country into recession, continues to drag on recovery, with many Americans underwater.
Some experts say despite signs the sector may be bumping along a bottom, full recovery is a long way off if it ever even comes at all.
"I worry that we might not see a really major turnaround in our lifetimes," says Yale economist Robert Shiller, co-designer of the S&P/Case-Shiller Home Price Index, ac
Author: Stephanie Danielson, Broker/Owner (CDPE Certified)
Acuity Group Real Estate Professionals
601 Main St. Elk River MN 55330
Office: 763-633-3535
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Stephanie Direct: 612-242-8747 or Stephanie@ACGproperty.com
Acuity Group Specializes in Traditional Buyer/Seller Transactions, Short Sales, Investment Property Consulting and Management, Rentals and Property Management.
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