Earlier this week, Bank of America announced it would reduce loan balances for certain borrowers. Today, the Obama administration is expected to roll out a new set of mortgage help plans.
Bank of America plans to help some people who owe more than their homes are worth. Only borrowers with the riskiest loans qualify for the latest initiative.
They must have option-ARM loans, which allow you to choose how much to pay each month. Sometimes payments are less than interest charges, so the loan balance can increase.
Mortgage modification is logistically difficult because banks often service loans they don't technically "own". They have to get permission from the loan's owner to make any changes.
Further reading:
The Banks are foreclosing every mortgage they can to get the equity. It’s a national scandal. You guys are regurgitating the administration’s press releases. Google “Chase Mortgage foreclosure” for a reality check.
Chase are horrible to deal with, but at least they don’t require you to be late. As an underwriter at Prime Loan Advisors in San Francisco, we fight an everyday uphill battle against large financial institutions that have failed to create an efficient loan modification process. Remember, these are the same banks that train-wrecked the economy and now require taxpayer bailout money to survive. It is important to note that there are many good negotiators who do a great job with loan modifications. They understand that the lenders have provided an inefficient and confusing process and that homeowners need good third-parties to help understand and navigate the process. Prime Loan Advisors is one of those parties.