So many home owners who have negative equity/are upside down in their homes are always looking and hoping banks are going to step up and help them with principle reductions. The latest buzz that many of us keep hearing about is from Bank of America. The have a new "Principle Reduction Program" that are suppose to reduce principles for home owners.
Below is a post written by Melissa Zavala Realtor® North San Diego County Homes that helps explain how this program works, who it should help and who it doesn't. If you think you might be eligible for a principle reduction on your BofA mortgage, be sure to click on the links provided to see if you are included in this exclusive group!
Thank you Melissa for providing this information.
At a recent event, I was asked about principal reductions at Bank of America. (By the way, I was also asked about whether the Mortgage Forgiveness Debt Relief Act of 2007 has been extended yet, and the answer is ‘no, not yet.’)
It’s possible that your clients may have heard about principal reduction on television, and are thinking that their $500,000 mortgage will be reduced to $250,000 in just a few weeks. Unfortunately, it does not work quite that way.
Starting earlier this year,announced that they are offering principal reductions of up to $100,000. Sounds great, right? But, just like every advertisement or announcement, it is important to read the fine print. And, here are the details that you really need to know.
According to the, these principal reductions will be made on loans that were originated by Countrywide Financial and packaged into securities. Bank of America acquired Countrywide in 2008, along with their good and bad assets.
As stated by Reuters, qualified borrowers are expected to receive principal reductions averaging over $100,000. Those receiving the reductions are be over sixty days late on their payments and they may see their mortgage balance cut to their home’s current market value.
Click here to go to the Bank of America site and learn more about this program and how the principal reduction will be calculated. (Pay careful attention to the calculations; unless you took Advanced Calculus in graduate school, you may have to read and reread several times.)
If you take nothing else away from this article, please remember these points:
- This is not foror loans. You and your loan (or your client and his or her loan) must be eligible based on very specific requirements.
- Only loans owned by Bank of America or private investors are eligible, and those include mortgages originated by Countrywide Financial Corp.
- In order to qualify, the client must be 60 days delinquent as of January 31, 2012.
If you meet a prospective short sale seller, and he or she is interested in exploring principal reduction at Bank of America, head on over to the website. In just a few clicks, your client will learn whether or not he or she qualifies this program. I’m betting ‘not’—but it is worth a shot. Good luck!
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