Consumer Law

BankofAmerica signs on to Home Affordable

By Alan White

Bank of America announced this week that it has begun refinancing mortgages at up to 105% of home values under the Fannie/Freddie Home Affordable program, part of the Administration's foreclosure relief plan.  There are two main components to Home Affordable, the refinancing of existing mortgages that are not behind and modification of mortgages that are.  Refinancing doesn't really solve the excess debt problem, but it does slow down the foreclosure machine a bit.

 BofA also announced that it will begin offering the new and improved mortgage modifications consistent with Home Affordable guidelines in the next two weeks, and is extending its moratorium on foreclosures until April 30.  The press release mentions that homeowners needing modifications will first be placed on "trial modifications", i.e. short-term payment agreements that must be converted to permanent modifications after 3 to 6 months.  Treasury's guidelines for modifications released in March contemplated that servicers could begin offering compliant modifications on a trial basis, pending full development of the program.  The contracts between Treasury and servicers for incentive payments and data reporting on mortgage modification and foreclosures have not been rolled out yet, but are due out by the end of April.

Meanwhile according to a report on BankruptcyProfBlog the Bankruptcy legislation to permit modification of mortgages to actually reduce debt to align with property values appears to be dying a slow death in the Senate.

Full post as published by CL&P Blog on April 11, 2009 (boomark / email).