Bank of American Offering Principal Reductions

Bank of America is offering…PRINCIPAL REDUCTIONS!

You read that right..the nations largest lender is now going to offer a program to bail out underwater owners…here are the details directly from BofA:

CALABASAS, Calif. — Bank of America, a leader in developing and carrying out programs to help financially distressed homeowners, is leveraging the federal government’s Hardest Hit Fund (HHF) initiative to begin pilot programs of principal reductions for customers in Arizona who owe considerably more on their mortgage than their property is worth in today’s depressed market.

The bank has become the first major mortgage servicer to send letters of interest to homeowners who may qualify for HHF-supported principal reductions in these states. Previously, Bank of America began testing and implementing new programs for unemployed homeowners in several other states receiving HHF support.

“Bank of America remains committed to helping distressed borrowers remain in their homes through a variety of programs,” said Terry Laughlin, executive vice president.  “Since the Obama administration established the Hardest Hit Fund (HHF) initiative one year ago, Bank of America has worked closely with both the Department of Treasury and state housing agencies to design and implement the program to provide interim payment assistance to unemployed borrowers, as well as funding for loan modification assistance to delinquent borrowers. We are excited this program is coming to fruition.”

Through the Arizona pilot program, Bank of America customers experiencing financial hardship may be eligible to have the amount owed on their mortgage reduced through matching contributions from the state and from participating mortgage investors. Bank of America has begun mailing letters to customers in those states who may qualify for the assistance based on state program and investor guidelines. The offers are being made proactively in conjunction with the solicitation process for the federal government’s Home Affordable Modification Program.

Bank of America also is finalizing processes for a pilot principal reduction program with the Nevada Affordable Housing Assistance Authority and is in advanced discussions with the California Housing Finance Agency to begin a pilot program with that state.

Bank of America established its leadership in providing solutions for severely underwater homeowners last spring with an innovative principal forgiveness program for eligible customers under its own National Homeownership Retention Program. HHF will provide assistance to additional homeowners who, mainly due to drastic decreases in home values in the last three years, are upside-down on their mortgages.

Bank of America

The HHF unemployment program offers qualified borrowers mortgage payment assistance for up to 36 months while they are unemployed, depending on state program guidelines. Bank of America is currently involved in pilots of unemployment assistance programs in California, North Carolina, South Carolina, Ohio, Oregon, Lee County, Florida, and Washington, DC. Customers who are interested in these programs should work with their state housing finance agencies to determine their eligibility.

Bank of America will continue expanding these programs on a state-by-state basis as agreements are reached with interested housing finance agencies in other HHF-grant states.

All HHF programs are targeted to low- and moderate-income homeowners, and eligibility also depends on investor participation.