A principle reduction will be offered to over 200,000 Bank of America homeowners who are struggling with their mortgage payments. It’s an offer that sounds too good to be true, but Bank of America is doing it anyway. They will mail out letters with the principle reduction offer to their struggling homeowners this week. So, be on the lookout. If you toss it, you won’t be eligible. Some borrowers could get as much as $150,000 reduced from their mortgage balance.
The Bank of America principle reduction program is part of the $25 billion settlement that was reached this year between state and federal agencies and five of America’s biggest mortgage servicers. Originally, Bank of America agreed to an $11 billion mortgage principle reduction, but they are now going above and beyond while committing to $25 billion. Over 5,000 borrowers have already gotten $700 million in principle reduction, collectively, through the pilot program.
Do you qualify for a mortgage principle reduction? You can if you are over sixty days late on your mortgage payments as of January 31, 2012. You also have to owe more on the mortgage that what the home is currently worth. Your home loan must also be owned or serviced by Bank of America. If you do get a letter and think you qualify, you will have to answer the letter with full documentation of your income, and your payment must be more than 25% of your gross income.
Bank of America borrowers could get well over $100,000 in loan forgiveness per homeowner. So, be on the lookout for a certified letter from Bank of America. You can obtain a sample letter from CNBC online so you will know if you have legitimate letter. Don’t get scammed. The letter will be simple and will have a red box on the top corner labeled “IMPORTANT”, “Qualifying customers may reduce their monthly payment by an average of 35%”.