Bank of America (BoA) has begun mailing some 200,000 letters offering certain customers a mortgage principal reduction. Eligible borrowers could get their mortgage balance lowered by as much as $150,000. This is all part of the $25 billion settlement reached between the nation’s five largest mortgage servicers & federal and state agencies over fraudulent foreclosure documents.
In order to qualify, the eligible homeowners must:
- Answer the modification letter with a full documentation of income (Don't lose the letter)
- Be able to show that they can still make the monthly payment.
- Have a current monthly payment that is more than 25 percent of their gross income
- Show they are unable to afford their current payment
- Have a loan either owned by Bank of America or serviced by Bank of America for an investor who is allowing the modifications.
- owe more on the mortgage than the home is currently worth
- must be 60 days late on the mortgage payment as of Jan. 31, 2012.
If the homeowner qualifies, Bank of America will bring their monthly mortgage payment down to 25% of the borrower’s gross income. That could mean principal forgiveness well over $100,000, as there is no limit to the amount of the current mortgage.
Be on the lookout for a mailed certified letter from Bank of America with a red box in the top corner labeled, “IMPORTANT” and that states, “Qualifying customers may reduce their monthly payment by an average of 35 percent.”