Bank of America is considering offering unemployed homeowners who cannot afford their mortgage payments a full nine months of forbearance while they search for a new job. If, during the nine months, the borrower is able to obtain employment, Bank of America pledges to structure a mortgage loan modification based on the borrower’s new income.
Borrowers who fail to find new employment within the forbearance period would be required to relinquish the home through a deed-in-lieu transaction, which could be slightly easier on their credit and could possibly help them become eligible for mortgage and lending assistance sooner in the future thanks to Fannie Mae’s new lending policies, that allow for a variety of contingencies and extenuating circumstances to be factored in should customers wish to apply for a new mortgage within just a few years of defaulting on their old one, pre-foreclosure events like deed-in-lieu being one of the eligible events for that program.
Additionally, once the property is relinquished to Bank of America, the borrower could receive 2,000 dollars or more toward their transition out of the old home and into another residence. Bank of America told DS News that “We continue to evolve our home retention programs to meet the changing needs of our customers and to reflect the insights we are gaining through our experience in assisting our customers.”
Presently, the bank’s forbearance program is nothing more than a proposal. It will have to be approved by regulators and probably tested before it goes into effect on a large scale.
Thank you for reading http://realestate.BryanEllis.com – your comments are welcomed below.
The DEVIL is in the DETAILS….
On the surface, this proposal generates goodwill for BOA, which is running on fumes in the PR department.
No one contends this point!
Unfortunately, even this early proposal is filled with “what ifs” – such as 100% releasing borrower who can’t get modified loan from rabid debt collectors after forced “deed-in-lieu”.
Will BOA provide full payoff and satisfaction in exchange for the keys?
Further, will BOA reduce principal as part of THIS proposal?
These are just two of many questions I have about this latest incarnation. Sheesh, you have to be a news (rumor) junkie these days to stay up with all these alphabet soup programs and proposals.
Here’s what is interesting, Bryan: Now that HAFA is a few weeks into effect (and more than a month onto the front page), I still can’t get straight answers from loss mit/short sale department people (even in the AVPs office) re: HAFA.
You see the fallout to all these programs/proposals? The font line “doers” don’t know what to do while the BOA execs fire off press release after release attempting to rebuild tattered image.
Just my .03 (adjusted for inflation)
Mike
Tired realtor in Sarasota….
It appears B of A is trying to generate more positive press for itself. They remain one of the toughest to negotiate short sales and seek any additional way they can gather information on the homeowner that will allow them to squeeze more money out of them.
Translation they probably don’t have the original note on most of their files and are just trying to save their butts. I have never and will never do business with BofA.
On the “Surface” this New 9 Month “Forbearance” on Payments Looks like a godsend to Financially Troubled Homeowners ! ! ! !
BUT BE SURE TO READ THE FINE PRINT BEFORE SIGNING ANY FORBEARANCE AGREEMENT TO BE SURE YOU KNOW WHAT ONE IS GETTING THEMSELVES INTO.
Otherwise One might find themselves “Out of the Frying Pan and Into the Fire” so to speak.
After Working in the Pre-Foreclosure Market as an Investor for over 15 years, we’ve had our share of “Forbearance Agreements” that we’ve worked on. Each one of them DOES HAVE “FINE PRINT”.
Be Sure to Make Darned Sure that BEFORE Signing any such Agreement with a Lender that You DO Take the Time to actually Read and Look UP the Legal Definitions for the Terms that are used in this Document. I Highly suggest that one use a Law Dictionary such as “Black’s Law Dictionary”. Short of this, one can go to: http://Dictionary.Law.com and Get a Less Detailed
Definition.
This is Not Intended to BE Legal Advice, but rather as just Plain Ole “Common Sense”, which is unfortunately not so common these days, and practical first hand experience. So if one reading this is Looking for Legal Advice, the writer strongly suggests that the reader should seek competent legal advice.
HERE IS BLACK’S LAW DICTIONARY’S DEFINITION OF . . .
FORBEARANCE, n. 1. The act of refraining from enforcing a right, obligation, or debt. Strictly speaking, forbearance denotes an intentional negative act, while omission or neglect is an unintentional negative act. 2. The act of tolerating or abstaining. – forbear. vb.
Hope Definition gets the reader off to a Good Start and that this Viewpoint Proves Helpful too.
IF Anyone Reading this has a Copy of this Forbearance Agreement language that is being offered by Bank of America … Please share the “Fine Print” here with others. Thank You.