Make us your home page
Instagram

Many homeowners with Bank of America mortgages to get modification offers

LOS ANGELES — Homeowners with Bank of America mortgages have good reason to check their mailboxes.

The lender said Tuesday that it has begun mailing letters to customers who may qualify to have their home loans reduced as part of a multistate settlement over alleged foreclosure abuses.

The company, based in Charlotte, N.C., estimates that more than 200,000 of its customers could potentially be in line for a reduction in the principal balance on their mortgage.

Some customers could receive letters from the bank as early as this week that invite them to provide financial information as part of a review process for the program. The bank plans to have mailed out most of the letters by the end of the third quarter.

Bank of America estimates that customers who end up receiving the loan modifications will save, on average, 30 percent a month on their mortgage payments.

Among the criteria to qualify, borrowers must owe more on their mortgage than the property is worth and be at least 60 days behind on payments as of Jan. 31.

Bank of America will reduce the amount owed by the homeowners by as much as $100,000 in some cases. And only mortgages that are currently owned by Bank of America will qualify. Those that are owned by government entities Fannie Mae and Freddie Mac, or backed by the Federal Housing Administration, will not be eligible.

The lender said it began reducing the principal balance on mortgages in March, focusing initially on homeowners who already had a loan modification bid under review.

Under this initiative, the bank said it has mailed 5,000 trial modification offers, representing potentially more than $700 million in forgiven principal balances.

Bank of America, Wells Fargo, JPMorgan Chase, Citigroup and Ally Financial agreed to a $25 billion settlement with 49 state attorneys general and federal officials in February.

Most of the settlement is earmarked for reducing loans for about 1 million U.S. households that owe more on their mortgages than their homes are worth.

About 11 million American households are "underwater" on their mortgages, meaning they owe more than their homes are worth. The broader settlement is expected to reduce loans for only about 1 million of those Americans and send checks to others who were improperly foreclosed upon.

Of the five major lenders, Bank of America's penalties were the highest at $11.8 billion.

The settlement ended a painful chapter of the financial crisis, when home values sank and millions edged toward foreclosure. Lender abuses exacerbated the crisis. Many companies processed foreclosures without verifying documents. Some employees signed papers they hadn't read or used fake signatures to speed foreclosures, a practice known as robo-signing.

Many homeowners with Bank of America mortgages to get modification offers 05/08/12 [Last modified: Tuesday, May 8, 2012 10:31pm]
Photo reprints | Article reprints

Copyright: For copyright information, please check with the distributor of this item, Associated Press.
    

Join the discussion: Click to view comments, add yours

Loading...
  1. USAA expansion at Crosstown Center may bring Tampa 1,000 more jobs

    Corporate

    BRANDON — USAA will bring as many as 1,000 more jobs to Hillsborough County in early 2019 with the expansion of its existing operations in Brandon.

    Stuart Parker, president and chief executive officer of USAA, speaks at the company's new Crosstown Center location in Brandon during a visit following its 2015 opening. [DOUGLAS R. CLIFFORD   |   Times, 2016]
  2. FHP bids for pay raise a week after disastrous publicity

    Legislature

    TALLAHASSEE — This is real bad timing.

    FHP license plate.
  3. Rhetoric over: Three-nation effort to revise NAFTA begin

    National

    WASHINGTON — Of all the trade deals he lambasted on the campaign trail as threats to American workers, President Donald Trump reserved particular scorn for one: The North American Free Trade Agreement.

    Claudio Montes checks a shipping manifest for U.S. manufactured parts heading to assembly plants in Mexico at Freight Dispatch Service Agency LTD in Pharr, Texas, in June. The freight service ships parts between the U.S. and Mexico that pass through the border freely due to the North American Free Trade Agreement. Of all the trade deals he lambasted on the campaign trail as threats to American workers, President Donald Trump reserved particular scorn for one: NAFTA. [Nathan Lambrecht | The Monitor via AP]
  4. Rick Scott finds out today if he has backing on Venezuela

    State Roundup

    TALLAHASSEE — Now Florida's Cabinet gets to weigh in on Venezuela.

    Florida Governor Rick Scott interacts with people as he holds a Venezuelan Freedom Rally at El Arepazo 2 restaurant on July 10 in Miam. Governor Scott called on the Venezuelan government to free Leopoldo Lopez, a political prisoner from house arrest, as well as those that have been wrongly imprisoned by Nicolas Maduro's government.  [Joe Raedle | Getty Images]
  5. Publix continues to invest in online and app delivery through in-house promotion

    Retail

    Publix Supermarkets is investing more heavily in its online and app development by naming a new vice president to head this growing department.

    Publix Supermarkets is investing more heavily in its online and app development by naming a new vice president to head this growing department. 
[SCOTT KEELER   |   TIMES
 file photo]