Hundreds of thousands of homeowners may finally get a REAL shot at a mortgage modification. That's right, a REAL shot.
Bank of America is allowing 200,000 homeowners to cut their mortgage principal -- that goes straight to the heart of what is probably your biggest debt. It means some could end up owing up to $150,000 less, and writing a much smaller mortgage check every month.
So keep a close eye on your mail -- Bank of America tells us the letter will look different from most letters from the bank. It will be marked “IMPORTANT,” and sent by certified mail.
Millions of Americans have already tried to get these modifications and been turned down, even after hours of providing volumes of paperwork. But it may be worth it in this case to try again -- to go through all that documentation again. Because this time, it's real.
Bank of America said it's doing this after pressure from the government -- this settles allegations that the bank (along with other lenders) was involved in robo-signing (it was part of a massive $25 billion settlement with the federal government and 49 states over alleged foreclosure abuses). Robo-signing involved people who represented the bank processing thousands of foreclosures as quickly as they could, sometimes forging and faking documents.
Other banks may try similar programs as well, but we'll have to wait and see.
Who will get help? If you've struggled, and managed to pay your bills, sorry. If you've lost your job, sorry. The program is for people who are two months behind but still have income, so there's a good chance they can pay off the rest of the loan.
Here's some of the criteria:
People who are "underwater" -- meaning, you owe more on your mortgage than your home is worth today.
You were 60 days behind on your payments as of January 31, 2012.
Your monthly payments (principal, interest, taxes, insurance, etc) is more than 25% of your gross household income.
You must have household income.
How will you know if you're on the list? The bank says it's begun mailing out letters, and that most of them will go out over the summer.
For further information on the settlement programs, Bank of America Home Loans customers may call 1-877-488-7814.