Bank Of America Starting To Nudge Its Mortgage Write-Down Plan Along

Like the super-slow fat cat that it is, Bank of America is finally easing its rump into a mortgage principal writedown plan, as part of the $25 billion settlement between it, other large mortgage servicers and the government. It announced today that it will start to contact homeowners who may be eligible for the program beginning this week.

According to the Chicago Tribune, more than 200,000 bank customers will receive letters this week regarding their potential eligibility, but most of the letters will be sent in the third quarter of this year.

Those who participate in the program will end up saving around 30% on their monthly payments, predicts BofA. It made some principal reduction offers already in March.

The plan doesn’t include homeowners whose mortgages are held by Fannie Mae, Freddie Mac, the Federal Housing Administration or the Veterans Administration but are serviced by Bank of America.

BofA begins mortgage write-down effort under robo-signing deal [Chicago Tribune]

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  1. sjb says:

    And those that take up this offer with BofA will have their house go into foreclosure for some unexplained reason.

    • howie_in_az says:

      It won’t be unexplained — it’ll be the all-inclusive “computer glitch”.

      As a software developer, I’m a little insulted by “computer glitches”. They’re not “glitches”, they’re the specs we got from the business. But of course the business doesn’t want to take the blame so they blame the developers.

  2. Schildkrote says:

    Man, they really need to work harder at being a terrible company if they want to beat Nintendo or whatever company gamers decide should win for WCIA2013.

  3. AllanG54 says:

    And critics asre unhappy because those that keep paying their mortgages no matter what the value of their houses think it’s unfair. You can’t please everyone. Damned if you do, damned if you don’t.

  4. John says:

    Maybe my time to move on from the Consumerist has just arrived. I read this story and I see that a big bank is now modifying signed contracts to its detriment because the other side breached. Then I read comments (although there are only a few above, I expect quite a few below), that will argue the bank isn’t doing enough.

    If I knew I would always have a paycheck, I would have bought a bigger house. If I knew when I was going to die, I would know when I could retire. We don’t know these things. Life is a risk. If you make a decision, sign a contract, and cannot honor it, that’s on you. I don’t get why the banks have to do this (unless they want to minimize their REO, and banks do not like REO, they are not in the business of house upkeep), but otherwise, any bank willing to eat part of the capital for no valid reason, really is doing above and beyond.

    My 2 cents.

    • sjb says:

      Has nothing to do with the homeowners state; Its just that BofA has no idea what goes on within itself. One part of the bank tries to do the modification but another part of the bank sees this as the account going delinquent and nether part of the bank seems to be able to communicate whats happening.

      Most likely their staffing has been cut in the name of efficiency and cost reduction to the point that the people are over loaded and no longer able to keep up with the volume of work needing to get done. The only way to keep up and your performance rating up, just accept what the computer throws at you as correct and just accept the recommended actions in mass. If they do not keep their performance up, you get demoted / fired. If you make a few to many mistakes you get demoted / fired. If you were employed by them, what do you do?

  5. dschmidt1007 says:

    Here’s hoping I get a letter – our house is so far underwater it’s not even funny. Even though we can afford the monthly unless we keep our house for about another 20 years, we won’t recoup the purchase price, let alone what we spent fixing it up. We are considering mailing them the keys since they won’t work with us, and all the programs out there to help people stay and get new mortgages require your monthly payment to be 31% or more of your monthly income.

    • ned4spd8874 says:

      Mine is 31% or more and I still can’t get help! Nobody want to help us that have made our payments on time. I honestly would love to sell the house and move on from it, but my home is worth half of what I owe! I’m paying nearly $1100/month and can’t save a dime to save my life right now.

  6. mattyb says:

    This stuff really pisses me off because it rewards irresponsibility. What about the hardworking people who still make their mortgage payments on their upside down houses? They get screwed while the people who made bad decisions get rewarded.

    • Sweet Revenge says:

      Amen!

    • Cor Aquilonis says:

      Narrowly escaping complete financial destruction and destitution with a balance sheet in tatters is not a reward. It’s turning a curb-stop into a gut-punch – it’s painful, but they’ll eventually recover; as opposed to just (metaphorically) dying in the street.

      You see, by making wise choices, you avoided the pain. Your drama-free life is your reward. Savor it.

  7. ScandalMgr says:

    So if I got this right, the agreement allows BoA to collect interest on that $25 billion write down until at least the end of the third quarter of 2012?

  8. ned4spd8874 says:

    Been trying to get them to help me since 2009 when I lost my job. I’m not holding my breath.