Bank of America could collect about $6 billion if it meets the deadline set by the Federal government to help struggling borrowers for the Making Home Affordable program.
But the Treasury Department released a report last week that showed only 11 percent, about 95,000, of Bank of America’s delinquent borrowers who are potentially eligible for the program have been given a loan modification. That puts Bank of America at the bottom of the list of major banks involved in the program.
“We’re sure working hard,” said Ken Scheller, Senior Vice President for Home Retention at Bank of America, when asked about his company’s low success rate. “We don’t want to be down there.”
There appear to be multiple problems, not the least of which is that many of the employees handling the modifications are completely new to the business. Angry investors complicate the issue, with 15 percent of them demanding that the bank get their approval for every single case.
Source: Washington Post, Renae Merle (10/12/2009)
My comment: “How pathetic is this. Whether a homeowner is able to keep their home might rest entirely on whether or not a large mega-corporation can figure out a way to handle administrative tasks. Who wants to bet they can find trained staff to carry out the duties of foreclosure? I bet that won’t be problematic.”
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{ 4 comments… read them below or add one }
BEWARE OF BANK OF AMERICA
Watch out for BofA loan/mod. dept.!!!!!! I recently tried to get into Obama’s mod. program, knowing I fit into all of his requirements of hardship. After contacting BofA’s loan/mod. dept., I was informed that the best they could do was a refinance that brought my monthly payments down by $275.00. I assumed I was getting the truth and the best possible scenario for ME. So, I followed through with the transaction and took it in the shorts! I ended up with a $10,000 refinance and a new loan that originated in 2009, which automatically removes me from Obama’s mod. criteria.
After seeing a cnn topic on Obama’s mod. program, stating BofA was not securing many mods for their clients, I investigated deeper with my new mortgage holder (from Worldwide to BofA). I was harshly informed by BofA”s loan/mod dept that “I have signed all the papers and that I should have read them more closely.” Unfortunately, they are right and feel completely taken by BofA. Even though my hardship status has not changed, my eligibility status for Obama’s mod program is no longer. Having a mortgage originated after 1/1/2009 excludes you from eligibility.
I now understand why BofA’s mod numbers are so much lower than the rest of the lenders. Why work the mod program, and lose mortgage revenues, when you can make thousands on points and refinances on people that think we’re going to be giving THEM (homeowners) the best possible deal. Well, they got me and now I/they know I am stuck. I’m sure they’re laughing loudly now, while saying “SUCKER”!
I’m out of luck at this point, because I have already signed. But, I hope that at least one reader can benefit from my losses. BEWARE OF BANK OF AMERICA!!!!!!!!!!!!
Correction: my original mortgage was with Countrywide–not Worldwide. And, kudos to Countrywide-I was quite happy with them. They’ll be missed!
@TR McNulty – Good info TR. I would venture to say other lenders are doing the same thing. Unfortunately, there is a section of the Obama Home Affordable program that says a lender should refinance the loan if the borrower qualifies – before attempting a loan mod. So, you are of the few borrowers who actually qualified for a refinance AND at a good rate. Obviously, you had equity, income and credit and so you got a low conventional rate. The catch-22 is that borrowers can have equity, income and credit yet still be experiencing a hardship. Many lenders are choosing to ignore this fact since they tend to not even burp at at a loan mod until the borrower has late payments. In the lender’s eye, borrowers are not that troubled if not one payment has been late. The borrower must firmly prove otherwise.
I use to be steadfast against borrowers using third party assistance to help with a loan mod. However, I confess I have changed my opinion about that in the past few months. Using a reputable, licensed company is the best avenue for a borrower – especially if they have are experiencing a hardship with no late pays. Writing the “hardship letter” and calculating income/expenses will be key factors in getting the mod approved. A top notch, experienced loan counselor/attorney/debt adjuster can help with that.
Hope things work out for you. Keep in mind that as we go through these challenges, things can change. It wouldn’t surprise me if after doing some analysis down the road, the Treasury finds things didn’t go as planned and begin to allow people in your situation to modify their loans – even after refinancing in 2009.
@TR McNulty – Thank you for your comments. Should be helpful to others.