Bank of America is Offering To Pay Off Second Mortgages?|Carson| Leesa Hammond
As part of the National Mortgage Settlement, Bank of America announced on Friday that it is in the process of mailing approximately 150,000 letters to their pre-qualified homeowners offering to cancel their second mortgage. The intention of Bank of America is to help improve the financial position of the homeowner by decreasing their monthly payment obligations and potentially creating an equity position in the property. Bank of America began mailing these notices to their qualified borrowers in July and will continue through December 2012. The letters will notify eligible homeowners that the full balance of the second lien mortgage will be forgiven and the lien removed and cleared. The borrower does have the option to call the bank to decline the offer within 30 days of receiving the letter. Hmm... isn't that interesting.
What is the criteria to have the second mortgage forgiven?
- Mortgage must be owned and serviced by Bank of America
- Eligible borrower must be severely delinquent
- Second mortgage must meet certain threshold of delinquency or property value criteria
- Does not matter who owns and services the first lien mortgage
- Only borrowers who receive the mortgage elimination letters are eligible
Downsides for the borrower:
- Unless you received second lien mortgage forgiveness letter, customers can not request to be part of the program
- If the borrower is currently in foreclosure the elimination of the second mortgage will not stop the foreclosure from proceeding
- Possibility of a tax liability, there are some exceptions – always check with your tax advisor
Good news:
- Bank of America will report the account paid and closed on the borrower’s credit report
- Bank of America will NOT pursue the homeowner for a deficiency judgment
Bank of America will continue to help customers who are in need of assistance with their mortgage. Contact Bank Of America's customer call center or by visiting them on the web to find out about other available programs.
mrsleesa@gmail.com
Leesa Hammond
Century 21 Amber
(310) 890-4439
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Comments
I have a deal that the homeowner actually received the letter. Had to search here to make sure it was true!
I am certainly not going to hold my breath!