Hampered by its takeover of Countrywide with its huge mortgage portfolio, Bank of America is lagging other big lenders in getting loans modified under the government’s Making Home Affordable program.According to Treasury Department data, only 11 percent (about 95,000) of Bank of America’s delinquent borrowers potentially eligible for the program have been given a loan modification, the Washington Post reported.
That compares with 27 percent, or 117,000, for JP Morgan Chase; 33 percent, or 68,000, at Citigroup; and 41 percent, or 32,000 for Morgan Stanley’s Saxon Mortgage Services.
At its Dallas area command center for the program, BofA is scrambling to get 125,000 loans into the Home Affordable Modification Program (HAMP) by the November deadline set by the Obama administration, the Post said.
BofA has doubled the number of employees handling loan modifications to 11,000, and the bank still has 240 openings.
But other lenders have done more, the Post reported. Wells Fargo said call volume tripled after HAMP was announced in February, prompting the bank to hire an additional 5,800 employees for loan modifications. Citigroup increased its loss-mitigation department from 450 employees in early 2008 to more than 4,000.
BofA’s effort has been hamstrung by a staff shortage and by adapting its computer systems and even fax machines to the scale of the program, the Post said.
Also, the bank initially took a conservative approach, requiring that borrowers document their income and complete other paperwork before granting preliminary approval for a modification. In August, BofA eased the requirement and began authorizing some modifications without getting all the documents first.
There was also a letter to eligible customers that gave them wrong information about the requirements and suggested BofA was not participating in the program, according to the Post.
BofA’s more than doubled its mortgage portfolio with the acquisition of Countrywide, which had a loan portfolio heavy with risky mortgages and delinquent borrowers.
Bank of America has a lot riding on the foreclosure prevention program, the newspaper said. The company stands to collect about $6 billion – some of which will be passed on to investors – of the $75 billion the administration has set aside for the Making Home Affordable program.
#1 by Todd Summers on December 19, 2009 - 8:07 pm
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I feel that I have been lied too and deliberatly put off by Bank of America. I have called and spent many hours on the phone to representatives and they put me on hold for an hour and then I was disconnected. This has happen several times. One representative named Brittney, said that I did not qualify for a modification after being laid off, so I looked up the qualifications and guess what? According to the guidlines by Oboma I do. Whats the matter with this country?
Who is eligible?
Have obtained the mortgage before Jan 1, 2009 The home should be owner occupied May be default or at risk of default Have the primary mortgage of less than $729,750
Who is NOT eligible?
Speculators, who bought as investment Those who misrepresented their income in the loan application Should not be a jumbo mortgage
What you should do?
If your total debt (like car loans etc) is more than 55% of your income, you are still eligible but should undergo debt counseling You should prove that you have income to make loan repayments. Use this Mortgage Modification Website to see if you qualify for Any Loan Modification
Benefits you will get
Refinance mortgage loan to low interest, rates cannot be less than 2% Borrowers who are prompt in making loan repayments will get incentive bonus of $1000 per year for 5 years Lender will lower the monthly payment to 31% of the gross income. The refinance will last for 5 years
The White House has called on servers to start on at least 1,000,000 modifications by December 1st. It is estimated that it could benefit 8 to 9 million homeowners from the new modification procedures. Even if you don’t meet the above eligible requirements you might still qualify for other Mortgage Modification Programs.