Well, it looks like promising news for Countrywide mortgage holders, BofA is going to start helping them, hopefully it works the way it supposed to! Read article from Money Magazine below.
If you currently have mortgage that you would like to get loan modifications
visit www.CarlosSamaniego.com to watch video on loan modifications and to get more help!
BofA to slash mortgage payments
The foreclosure prevention program is the most aggressive initiative undertaken yet to help stem the housing crisis.
NEW YORK (CNNMoney.com) — A plan announced today by Bank of America
will be the most aggressive foreclosure prevention effort ever
undertaken by a U.S. bank.
The program, scheduled to start in
December, will be open to distressed borrowers who signed up with
Countrywide Financial between January 1, 2004 and December 31, 2007.
Countrywide was acquired by Bank of America (BAC, Fortune 500) in July.
came in a legal settlement that the company entered into with the
attorney general offices of 11 states, who had sued Countrywide over
predatory lending practices, but the company stated that borrowers in
all 50 states will be eligible to participate in the program.
Countrywide settlement is a watershed moment for loan modification
programs," said Mark Pearce, North Carolina’s Deputy Commissioner of
Banks and a member of the State Foreclosure Prevention Working Group.
"This is, by far, the best [program ever], even better than the FDIC
program with IndyMac Bank."
As part of the initiative, Bank of
America will cut monthly housing payments, including mortgage, property
taxes and insurance, to no more than 34% of gross income. The move is
expected to help keep as many as 400,000 troubled borrowers in their
The program targets holders of subprime adjustable rate
mortgage (ARMs), subprime fixed rate loans and option ARMs, but prime
and Alt-A borrowers, who did not document their income, will be
eligible as well.
No other foreclosure prevention effort has aimed to keep borrowers’ house payments so low.
"[The program’s] affordability is far better than any other program out there," said Rick Simon, spokesman for Bank of America.
By contrast, the much heralded foreclosure-prevention initiative announced in August by the FDIC for customers of IndyMac Bank, the subprime lender that the agency took over in July, said it will keep borrower payments to no more than 38% of gross income.
is the biggest mandatory modification of loans in U.S. history," said
Jerry Brown, attorney general of California, the state with the largest
number of borrowers who may benefit from the settlement. "Of course, we
never saw such a big rip-off by any other company either."
to Simon, the Countrywide program will proactively screen all of its
borrowers for eligibility, and then contact them directly to offer loan
workouts. No prepayment penalties or modification fees will apply. But
the program can’t help every Countrywide borrower. Some, because of
illness, divorce, job loss and the like, simply won’t be able to afford
any reasonable mortgage payment.
Simon added that Bank of America
is training personnel and putting systems into place that it hopes will
enable staff to deal with a large number of mortgages all at once.
new program comes with a price tag of $8.4 billion, but Simon says that
it will cost much less than foreclosing on homes en masse.
credit crisis continues, more and more lenders and mortgage servicers
are coming to grips with the fact that preventing a foreclosure is
usually cheaper than going through the repossession process and then
reselling the property in a declining market.
Depending on each
borrower’s circumstances, Bank of America might freeze or lower a
loan’s interest rate or even cut the principal loan balance. The bank
said it will also participate in the government’s Hope for Homeowners
program, a provision of the housing rescue bill which went into effect
Oct. 1 and makes FHA-insured loans available for delinquent borrowers.
The announcement of the program came on the heels of Friday’s approval of the $700 billion Wall Street bailout, a measure which has been criticized for failing to address the foreclosure crisis head on.
The hope is that other lenders and servicers will follow Countrywide’s lead.
that we’ve gotten this with Countrywide, I would expect that we’ll be
talking with other major servicers to implement similar programs in the
near future," said North Carolina Deputy Commissioner of Banks Mark
Pearce, who worked on this settlement.
But he and other members
of the the State Foreclosure Prevention Working Group have been pushing
other lenders to do something this drastic for months, without much