Distressed Borrower Programs – Will They Work?
There seem to be more and more programs each and every day that are coming out of the woodwork to help distressed borrowers save their homes from foreclosure. Here are two of them that looked pretty interesting at first glance, but if you read between the lines, you may find something entirely different:
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Bank of America Offers Principal Reductions Up to $100,000 According to the Los Angeles Times, 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.
According to Reuters, qualified borrowers are expected to receive principal reductions averaging over $100,000. Those receiving the reductions will be over sixty days late on their payments and they may see their mortgage balance cut to their home’s current market value.
However, this program only for specific eligible loans—not Fannie Mae and Freddie Mac, and remember that you must be 60 days delinquent as of January 31, 2012.
Bank of America Offers a Rentback Program Most distressed borrowers love their homes and want to stay in them forever. If you or someone you know glanced at this article in the newspaper or heard about this program in the news, it may have piqued their interest.
However, this program is only for a total of 1000 homeowners, located in Arizona, New York and Nevada. And, if you qualify, Bank of America will be reaching out to you directly to offer you the opportunity.
While both of these programs sound great on the surface, it is important to read about them in their entirety. And, with Easter just around the corner, it is important not to put all of your eggs in one basket.