Tuesday, March 30, 2010
by Broderick Perkins
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Deadline Newsroom - Beginning in May, BofA will forgive up to 30 percent of the loan principal of homeowners who are severely "underwater," those who owe approximately 20 percent more than their homes are worth and have missed at least two payments.
The plan harkens back to the so-called "Mod in a Box" reduced-principal modification plan the Federal Deposit Insurance Corp., under Chairwoman Sheila Bair, used on many mortgages in the 2008 federal takeover of IndyMac.
Bair has continued to encourage reduced-principal modifications because the federal Home Affordable Modification Program has come up short without them, managing fewer than 200,000 permanent modifications out of a potential 3 million to 4 million eligible homeowners.
Even critics of the mortgage-lending industry's efforts to help struggling homeowners keep their homes are lauding Bank of America's reduced-principal approach to mortgage modifications for some 45,000 of its customers.
The much-encouraged but little-used reduced-principal approach to mortgage modifications has long been championed by federal officials and consumer advocates as the most effective type of modification.
You've got news...news that really hits home!The full story is here: "Praise for BofA's Mortgage Modification Plan"
Also: Struggling home owners awarded another $14 billion
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