Distressed BofA homeowners in Calif. now have chance of principal reduction

Bank of America has joined the Keep Your Home California principal-reduction program, making it the largest loan servicer involved in lowering loan balances for those with economic hardships.

Making sense of the story

• Keep Your Home California is a program offered through the California Housing Finance Agency to help struggling homeowners avoid foreclosure.
• Bank of America, which services more than two million home loans in California, joins others servicers involved in the program, including: California Dept. of Veterans Affairs, the California Housing Finance Agency, Community Trust/Self Help, GMAC, Guild Mortgage Company, and Vericrest Financial.  Agency officials hope the list will continue to grow, and that the program will continue to gain momentum.
• Under the program, qualified homeowners may be eligible for up to $50,000 in assistance.  The program requires the mortgage investor to match dollar-for-dollar the amount provided by the program.
• Bank of America borrowers who do not qualify for the principal-reduction program will be evaluated by bank representatives to explore other options, including a loan modification.
• To be eligible for the program, applicants must: Own and occupy their homes as their primary residence; not exceed $729,750 in current unpaid principal balances on first mortgages; meet low- and moderate-income limits; complete and sign a hardship affidavit to document reasons for hardships; have mortgage loans that are delinquent or “in imminent default;” and have enough income to pay modified mortgage payments according to guidelines from servicers participating in the programs.
• For more information about Keep Your Home California, visit keepyourhomecalifornia.org or call (888) 954-5337(KEEP).

Reprinted from C.A.R. Market Matters

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