Bank of America Increases Relocation Assistance Payments to Customers Completing Preapproved Price Short Sales Short Sales Provide Alternative to Foreclosure for Delinquent Borrowers Who Have Exhausted or Declined Home Retention Solutions
CALABASAS, Calif. – Adding to its foreclosure prevention initiatives, Bank of America has launched a nationwide program that offers delinquent mortgage customers increased assistance with relocation expenses – between $2,500 and $30,000 - at the completion of a qualifying short sale. “Bank of America is committed to providing alternatives to foreclosure whenever possible,” said Bob Hora, home transition services executive for Bank of America. “This program can help customers make a planned transition from ownership when home retention options have been exhausted or they have made a decision not to keep the home.”
The short sale relocation assistance program builds on the bank’s already robust short sale initiatives, which led to 200,000 completed short sales in the last two years and another 30,000 in the first quarter of 2012. This program is based on a similar incentive offer that Bank of America tested in Florida last year. To qualify for the enhanced relocation assistance payments under the new program, the seller must work proactively with the bank to obtain a preapproved sales price prior to submitting a purchase offer to the bank.
A short sale must be initiated by the end of this year and close by September 26, 2013, to be eligible for the payment. Qualifying short sales that have already been started but have not closed may be eligible for the relocation assistance. The amount of assistance provided under the new program will be determined on a case-by-case basis using a calculation that includes the value of the home, amount owed and other considerations.
Initially, the program will be offered on mortgages that are owned and serviced by Bank of America. While available nationally, Bank of America anticipates greatest response to the program will come from borrowers in California, Nevada, Arizona, Florida and other states hardest hit by the economic downturn and falling property values.
Customers who believe they may be eligible for Bank of America’s short sale relocation assistance program may contact program specialists at 877.459.2852. To help homeowners understand the short sale process and other foreclosure avoidance programs, Bank of America encourages them to visit the Home Transition Services website at www.bankofamerica.com/hometransition.
Bank of America Bank of America is one of the world's largest financial institutions, serving individual consumers, small- and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services.
The company provides unmatched convenience in the United States, serving approximately 57 million consumer and small business relationships with approximately 5,700 retail banking offices and approximately 17,250 ATMs and award-winning online banking with 30 million active users. Bank of America is among the world's leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world.
Bank of America offers industry-leading support to approximately 4 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients through operations in more than 40 countries. Bank of America Corporation stock (NYSE: BAC) is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange.
For more Bank of America news, visit the Bank of America newsroom. www.bankofamerica.com # # # Reporters May Contact: Rick Simon or Jumana Bauwens, Bank of America, 800.796.8448 firstname.lastname@example.org "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995:
Statements in this press release regarding Bank of America Corporation's business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report or Form 10-K for the most recently ended fiscal year.
Friday, May 18, 2012
Thursday, May 10, 2012
Underwater California homeowners to get more help
Thursday, May 10, 2012
In a big change, the state-run Keep Your Home California program will use federal money to reduce an eligible homeowner's mortgage balance by up to $100,000 without requiring a matching reduction by the bank servicing the loan.
Many more underwater California homeowners will get principal reductions when the change takes effect in early June, but there's a catch: The reduction is structured as a forgivable loan. If they sell their house within five years, any profit will go toward repaying the principal reduction. After five years, there is no repayment requirement. Under current rules, the loan is forgiven after three years.
Loans backed by Fannie Mae and Freddie Mac are potentially eligible for principal reduction under this program.The money is coming from a $2 billion grant the state was awarded in 2010 from the U.S. Treasury Department's Hardest Hit Fund. The grant provides four types of assistance to low- and moderate-income homeowners who can document a financial hardship.
The program allocated $772 million of that money to reduce principal by up to $50,000 per homeowner, but it required a dollar-for-dollar reduction by the servicer. Few servicers participated in this part of the program, and it only applied to loans held in their own portfolios.
As a result, only 926 homeowners qualified for principal reductions totaling $44 million.
Servicers' roleThe California Housing Finance Agency, which runs the program, says that starting in early June, it will no longer require servicers to provide a matching reduction, although they will have to modify the loan by reducing the interest rate, extending the term or both. Homeowners can still get up to $100,000 in principal reduction, but it will all come from the federal money.
The goal is to get the borrower's debt-to-income ratio to 31 percent and loan-to-value ratio under 120 percent, although "they can go as low as 105 percent LTV," says Diane Richardson, the program's director.
The agency expects to reduce principal for about 9,000 homeowners under the guidelines that take effect in June.
To qualify under the new rules, homeowners must use the home as their primary residence, owe more than it's worth, fall below the income limit for their county, demonstrate a financial hardship and owe no more than $729,750 on a first mortgage originated on or before Jan. 1, 2010. (The previous cutoff date was Jan. 1, 2009.)
In San Francisco the household income limit is $121,900. For other counties see keepyourhomecalifornia.org/files/income.pdf.
The owner's servicer must be part of the program, but more servicers probably will participate if they don't have to cut principal out of their own pockets.
The program originally prevented people who had taken cash out of their homes - through a cash-out refinance or home equity loan - from getting a principal reduction but it lifted that restriction last fall.
The Treasury Department has approved the latest rule changes.
The Obama administration has been pressuring Fannie Mae and Freddie Mac to permanently reduce principal on underwater loans. The Federal Housing Finance Agency, which regulates Fannie and Freddie, has not allowed them to forgive principal but has allowed temporary reductions known as principal forbearance as part of a loan modification.
A spokeswoman for the federal agency says Fannie and Freddie may accept the pay down of mortgage principal funded through a Hardest Hit Fund program - including Keep Your Home California - as long as other servicing guidelines are met.
Stance unchangedThat doesn't mean the federal agency has changed its stance and will allow principal forgiveness on Fannie and Freddie loans outside of such programs.
The California agency announced several other changes to its four Keep Your Home California programs:
-- Starting in early June, homeowners can receive up to $100,000 in total assistance from one or more of the programs. The current household limit is $50,000.
-- As of May 7, homeowners with a financial hardship can receive up to $25,000 to catch up on missed mortgage payments. The current limit is $20,000.
-- Starting in early June, principal reduction will be disbursed in the first year rather than spread over three years.
On all programs combined, the state has spent $411 million of the $2 billion it received from the Hardest Hit Fund. It has until the end of 2017 to spend the remaining funds.
To apply for the program, call (888) 954-5337. Applications for principal reduction under the new rules will not be taken until early June.
This article appeared on page D - 1 of the San Francisco Chronicle