Bank of America committed $11 billion to mortgage principal reduction as part of the robo-signing scandal settlement, and last month, Bank of America announced a major initiative addressing this sum.
This summer, a group of 200,000 distressed homeowners selected by Bank of America will receive proactive principal reductions of up to $150,000 dollars. This group of homeowners will be notified via letters in the mail, which will be sent in waves throughout the summer.
After receiving the letters, these homeowners will be responsible for proving their eligibility, which includes:
- Homeowner must be “underwater” on their mortgage
- Homeowner’s loan must be owned by Bank of America or serviced by Bank of America for an investor who approves the modification.
- And the homeowner must provide documentation of income and the ability to make payments under the terms of the modification.
If the homeowner does indeed qualify, Bank of America will lower the monthly mortgage payment to 25 percent of the borrower’s total income.
If you know of homeowners who have a Bank of America loan and may be eligible, be sure to tell them to check their mailboxes this summer! The modification can only occur if a homeowner opens and responds to the letter.
Third Party Authorization Form
In April, Bank of America introduced some major changes to the way short sales are initiated. One of the most talked about changes is the new Third Party Authorization form.
On the form, Bank of America stated that only a licensed real estate professional would be allowed to do any work on their client’s behalf. This caused quite a bit of concern for high-volume agents who have assistants who help with processing a file, and Bank of America got a lot of feedback about the new policy.
Last week, Bank of America amended the form.
The updated version includes an area for “Designated Representatives” from your team to be listed, which will enable them to communicate with the bank under your supervision.