Bank of America Gives Underwater Homeowners Debt Gift
By Bobby Freeman, Florida Realtors® // May 17, 2012
BREVARD COUNTY, FLORIDA • MELBOURNE, FLORIDA – As part of the $25 billion multi-bank settlement with state attorneys general and the U.S. Department of Justice, Bank of America is planning to offer up to 200,000 underwater homeowners debt reduction on their existing mortgages.
To be eligible, a borrower must be 60 days late on their mortgage and owe more on the mortgage than the home is currently worth.
“If these homeowners actually take advantage of this program, and if Bank of America does not make the process difficult as they have done in the past with modifications, this could be a huge leap forward in the overall real estate markets recovery,” said Shawn Fortenberry, short sale specialist and owner of Prestige Title in Melbourne.
You can expect variations of this debt reduction program to be implemented by all four of the other banks (Chase, GMAC, CITI and Wells Fargo) that were included in the lawsuit.”
Full Documentation of Income
Soon eligible homeowners will be receiving letters they must answer with full documentation of income showing that they can still make the monthly payment.
A borrower’s current monthly payment must be more than 25 percent of their gross income. These eligible borrowers could get as much as $150,000 reduced off of their mortgage balance.
“If you can afford to make your monthly payment and are choosing not to, you will not get this principal modification,” said Ron Sturzenegger, the Bank of America executive charged with providing solutions to borrowers in need of mortgage assistance.
Foreclosure Actions Suspended
Bank of America has suspended any foreclosure actions against these borrowers until the process is complete. According to Lender Processing Services, there are currently 5.59 million U.S. loans that are either delinquent or in the foreclosure process.
Although this is a step in the right direction for those who qualify, how about those homeowners that have made monthly payments on time and have possibly drained their savings to make those payments?
And how about those homeowners that paid all cash and then watched their home values drop over 50 percent? Will our government step in and help them?
ABOUT THE AUTHOR
Bobby Freeman, a life-time resident of Brevard County, has been a top Realtor in the area for two decades. In his first year as an agent, Freeman received a Rising Star award from his Brokers. Since then he has achieved numerous sales awards and has recently been presented with the prestigious RE/MAX Hall of Fame Award.
Freeman, Jennifer McCoy and Nikki McCoy Freeman are family partners for RE/MAX Elite’s McCoy-Freeman Group. Together they have more than 30 years of extensive experience in all aspects of the real estate industry and have sold over $150 million. Among McCoy-Freeman Group’s achievement are RE/MAX Hall of Fame, RE/MAX 100% Club, Certified Distressed Property Experts (CDPE), Accredited Buyer’s Representative (ABR) and voted Best Realtor in Brevard County. The group has been featured in many news publications including CNN Money Magazine, CNNMoney.com, WFTV 9 ABC News, Florida Today, Coastal Condo Living, & Hot Retirement Towns Magazine and SpaceCoastDaily.com.
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