Update on Department of Justice
The U.S. Department of Justice (DOJ) and the state attorneys general have agreed to the terms of a global settlement with the largest mortgage servicers, including Bank of America. This government agreement enhances our ongoing commitment to help homeowners who are struggling to make their mortgage payments by extending additional options.
Under the agreement, Bank of America:
- Is implementing a new modification program that offers principal reduction to qualified customers.
- Will work to lower interest rates to provide reduced payments for eligible homeowners who are current on their payments but owe more than the current value of their homes (mortgage must be owned by the bank).
- Will continue to help customers who are pursuing short sales and may offer additional assistance programs, such as deed in lieu of foreclosure and/or financial assistance to help those who are transitioning out of their properties.
How this may affect short sale agents:
Some customers who are currently in the short sale process may qualify for this program. Customers who are pursuing a short sale can continue with the process while in review for the DOJ principal reduction program. If a short sale customer is approved for the DOJ principal reduction modification, they will then have to decide which option is best for them, either continuing with the short sale or accepting the modification.
If the customer chooses to accept the modification, then they are electing to discontinue their short sale. It is important for the customer to consider all options and determine which one is best for them based on their individual needs.
Furthermore, the borrower needs to understand that there could be legal implications to cancelling the short sale if they have already entered into a contract with a prospective buyer in the short sale process. The borrower should consult with you and an attorney before making this important decision. There is no guarantee that a customer will be approved for either a short sale or the DOJ principal reduction program.
Short Sale/Deed in Lieu
- Homeowner can move into more affordable housing.
- If the homeowner has already signed a short sale contract, they should discuss their legal and financial obligations with their trusted advisors, such as a legal counsel or real estate agent.
- If the homeowner cancels the short sale or deed in lieu, they will not be eligible for relocation assistance.
DOJ Principal Reduction
- Homeowner may be able to stay in their property at a lower monthly payment.
- If approved, homeowner will improve their equity position.
- If declined, homeowner can reapply at a future date or continue to pursue a short sale; however, foreclosure activities may resume. NOTE: Foreclosure activities may continue based on state and investor guidelines.
At Bank of America, we are committed to making government and proprietary home loan assistance solutions available as quickly as possible. We are offering qualified customers these enhanced loan assistance solutions, including the new mortgage modification program that will include principal reduction.
Please visit the Agent Resource Center for education and updates on short sale programs
If you have questions, please contact:
Short Sale Customer Care
8 a.m. - 10 p.m. Eastern, Monday - Friday
9 a.m. - 5:30 p.m. Eastern, Saturday