“Countrywide loan modification News — Bank Of America Loan Modification news”
Here’s the latest on Countrywide B of A Loan Modifications 9/19/09
Seems Bank of America has come to their senses lately. I have heard of 4 loan modifications all over 1 million dollars that have been approved that were initially Option Arm loans. Seems that lenders are realizing that squatting doesn’t increase the bottom line revenues for the company. Don’t get me wrong, If you can live rent/mortgage free for a year without any notices or pressure from your lender, i think most people, even the honest ones would do it to survive. Whats interesting is that no one knew what these lenders were going to do with these option arm loans and now its apparent they don’t want the homes back. I know that all 4 of these borrowers had not made a payment in over a year and were actually trying to get a modification but were getting the run around from the lender who said throughout the year they were working on it. I think they are overwhelmed but also didn’t know what to do with these borrowers. After all its hard to modify someone who has been paying 1% for the last 3 years. Whats the new rate going to be .25% Don’t think so. But they had to do something and here’s what they did. They came back and gave 3% interest only for 3 years and did a forbearance on the balance in arrears. A pretty sweet deal considering 2 of these homes were second, vacation homes. This is actually smart of the lender. Why foreclose on a property that is down 30%, pay all the costs to foreclose then take the property back only to incur a huge loss on the deal when it sells. Better to cut a deal with the current owner, reduce the rate to match almost what they were paying, generate some revenue and wait to see if the market corrects. At least they’re generating some cash flow and the home will be maintained. If the market rebounds in 3 years the equity comes back and the banks loss might be substantially less if not eliminated. Bout time they think outside the box a bit. Let me know if you have an option arm loan, we can fix them now.