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Thursday, March 17, 2011

BofA Launches Loan Modifications for Military Homeowners

Bank of America Launches Loan Modifications for Military Homeowners

 R I S M E D I A ,  March 14, 2011—(MCT)—Bank of America Corp. recently announced a mortgage modification program for military customers, including principal forgiveness for some struggling borrowers. The Charlotte bank said the program assists military members who are leaving active duty and having trouble making their mortgage payments.

The announcement comes as big banks are in settlement discussions with banking regulators and state attorneys general over their handling of foreclosures and modifications. The banks may face a requirement that they reduce principal for borrowers, a measure they’re resisting.
To make payments affordable, Bank of America’s new program will first reduce the amount owed on a borrower’s mortgage to as low as 100% of the home’s current market value. After that, the bank can also reduce the interest rate on the loan, as needed.
Starting April 1, Bank of America said, it also will offer a 4% interest rate on mortgages for active duty military members while they are under the protection of the Servicemembers Civil Relief Act, lower than the 6% that is required.
The bank said the modification program and the lower interest rates will initially be offered to customers with loans owned and serviced by the bank. It said it’s in discussions with investors in other mortgages that it services.
“Military men and women face extraordinary circumstances, and they make unique sacrifices for all of us,” said Laughlin in a statement. “For these reasons, we want this combination of tools to address their needs and help them when they need it most.”
(c) 2011, The C h a r l o t t e  O b s e r v e r (Charlotte, N.C.).
Distributed by M c C l a t c h y - T r i b u n e  I n f o r m a t i o n Services.

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