Bank of America is a participating lender in the Federal Mortgage Loan Modification Plan, the program designed to assist homeowners lower their monthly home loan payments.
This standardized program has basic criteria that determine which homeowners are eligible. For those who qualify, a share of the seventy billion dollars can help them reduce their mortgage payments.
Since the government is paying a stipend to participating lenders like Bank of America, you don't need to fear a negotiation process. All qualified applications will be processed.
You are a qualified homeowner if the mortgage you want reduced is on your primary residence; if your current monthly payment is 31% or more of your gross monthly income; if you have a financial hardship situation, such as risking losing your home; you took out the mortgage before January 1, 2009 and the balance is under $729,750.
When preparing your application be sure to keep the criteria in mind. These are the guidelines that determine eligibility for the mortgage loan modification program.
The Bank of America Loan Modification program does not apply only to first or primary loans. Second liens or mortgages can still be eligible. Homeowners that have suffered the loss of equity due to a second mortgage might be able to reduce the interest rate as low as 1%, or even have the entire debt eliminated. Participating lenders can be paid to forgive secondary liens that qualify under this plan, just as with primary loans. If you have a second mortgage, ask your lender about this option.
Qualified mortgage loans will be adjusted to reduce monthly payments to no more than 31% of your gross monthly income. In general, the following changes will be enacted:
1. Interest Rate Reduction: as low as 2%
2. Term: extended up to 40 years as necessary to lower monthly payment amount
3. Principal: some might qualify for deferral
Also, borrowers who stay on track with their new payments can receive a bonus with this program. Over five years, homeowners can get up to $5000 to reduce the principal balance of the mortgage and increase their equity.
The Bank of America loan modification program can mean the difference between keeping your home or losing it due to financial hardship. The application process is straightforward and all qualified homeowners are encouraged to apply. Talk with your lender as soon as possible to ensure your application gets processed before the funding is gone.
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