Bank of America's great mortgage give-away

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(MoneyWatch) Bank of America Home Loans is getting ready to give away billions of dollars. To get a piece of this pie, you have to have an existing mortgage with them, be late on your payments and owe more on the mortgage than your home is worth.

The mortgage lending and servicing unit, that includes the former Countrywide Financial business, has begun sending letters to customers informing them that they may forgive a portion of the principal balance on their mortgage.

In 2008, Bank of America (BAC) made an ill fated purchase of the failing Countrywide Financial for $4.1 billion. In 2006 Countrywide financed 20% of all mortgages in the United States, many of which were the toxic option ARM variety, at a value of about 3.5% of United States GDP. They issued more mortgages than any other single mortgage lender.

Bank of Americas new mortgage relief plan is targeted to reach out to more than 200,000 potential candidates for this assistance. The estimate is that folks who qualify could see up to $150,000 chopped off the balance of their mortgage, resulting in a 30 percent reduction in the mortgage payment.

This program is an expansion of the principal reduction offers the bank began offering in March, where they initially concentrated on homeowners who were already in the modification review process. So far under that program, about 5,000 trial modification offers have been mailed, providing a potential total of more than $700 million in forgiven principal, according to a statement issued by Bank of America.

The mailings beginning this week are designed to reach a broader base of customers who may be eligible for this principal reduction program.

According to Bank of America, to be eligible for this program, a homeowner must meet certain criteria, including:

The last requirement means that folks with loans that are backed by Fannie Mae, Freddie Mac and FHA/VA will not be eligible for this new program.

To find out more, folks can call Bank of America Home Loans at 1-877-488-7814.

So to sum it up, folks who took out mortgages that are now more than the value of their house and are late on their payments have an opportunity to get a lot of free money.

[Shronwah]

Excellent, well written article!!
Thanks for getting this information out there.

I will share this article with my friends and family.

http://www.reversemortgagelendersdirect.com/reverse-mortgage-information/

[BestDebtSecrets]

This is a great article. More people need to understand the particulars of how mortgages work. Our message board is designed to help consumers understand their debt situations. We encourage everyone to take a look at our site and offer some feedback. www.bestdebtsecrets.com

[cadwan-2009]

After filing about a dozen of these mortgage modification applications over the past four years, in addition to applications for assistance with attorneys, state officials, and federal officials, it becomes much easier to apply. One also becomes much more familiar with laws which prevent foreclosure. I recommend that everyone facing foreclosure continue their applications for mortgage modifications because mortgage companies cannot foreclose during the modification process and must conform to state and federal laws regarding advance notification process for foreclosure regardless of how many times the process is interrupted!

[Stephfan25]

The principal balance program is a great incentive for the homeowners who qualify. However, just as other bank and government programs such as HAMP, Hardest Hit Funds, Foreclosure Mediation Program also have fallen short of the intended goal.The problem is not the programs themselves it is the complex system and process required of the homeowner to obtain these programs. Despite all of the the government and bank programs in place, the homeowner is still faced with dealing with a sea of misinformation from third parties and bank representatives and are faced with filling out confusing paperwork. Which after a while causes the homeowner to just give up because they have no idea what information is needed and how to complete the forms accurately to ensure that they qualify for a mortgage reduction. The solution is to simplify the process for homeowners and to provide them with the tools they need to accurately complete the forms to so that they can qualify for a mortgage reduction without needing to rely on third parties or bank reps for help.

People who want to learn how to get a lower mortgage payment now have a solution that simplifies the process with the Loan Modification Pre-Qualifier and Mortgage Reduction software at www.consumereducationonline.com.

Stephfan Nurse, CEO, ConsumerEducationOnline.com