Bank of America offering more mortgage modifications related to robo-signing settlement
Bank of America is sending letters to 200,000 mortgage borrowers who may be eligible for loan modifications as part of the $25 billion legal settlement between large banks, the federal government and state governments including South Carolina.
The settlement announced in February was meant to resolve claims of foreclosure-related abuses against five major banks.
Bank of America said it will contact customers who may qualify over the next several months. About 5,000 already have been offered trial loan modifications.
Goose Creek resident Bruce Griffith said the process of seeking a loan modification from the Charlotte-based bank can be long and frustrating.
Griffith, 56, and his wife Deborah attended a Bank of America mortgage workshop Feb. 9 at the Charleston Area Convention Center — the same day the national settlement was announced — and applied for a modification.
“We’ve had to submit more paperwork and financial statements — 69 pages,” he said. “At this point we’re just waiting, just waiting.”
“I’ve never been the type to ask for help, but my wife is really sick and her medicine is $300 a month,” Griffith said. “We’re trying to get the loan modification so we can keep our house.”
The Griffiths fell behind, Bruce said, when Deborah became disabled by diabetes and kidney failure. She lost her job, Bruce later lost his job, and he has been working temporary jobs without benefits.
“Right now we’re going by the grace of God,” he said. “Hopefully I’m one of the customers who will be able to get a modification.”
Bank of America said the new round of loan modifications are meant for customers who owe more than their homes are worth, were at least 60 days behind on payments as of Jan. 31, and have home payments (including insurance and property taxes) that exceed 25 percent of their gross household income.
“To the extent principal reduction and other modification tools help us turn mortgages headed for possible foreclosure into long-term performing loans, it will be positive for homeowners, mortgage investors and communities,” said Ron Sturzenegger, the legacy asset servicing executive at the bank.
Bank of America estimated average monthly savings of 30 percent on mortgage payments of customers who qualify.
The other banks involved in the legal settlement are Wells Fargo, J.P. Morgan Chase, Citigroup and Ally Financial. Wells Fargo said it began contacting customers about settlement-related modifications in March.
Wells Fargo spokesman Josh Dunn said the San Francisco-based bank provided $4.1 billion in loan forgiveness before the settlement.
“Our efforts, as a result of this agreement, have expanded,” he said. “As of March 1 we started contacting borrowers who may qualify.”
Mikell Richards, vice president for mortgage banking at Harbor National Bank and immediate past president of the Mortgage Lenders of Greater Charleston, said the bank efforts could help people who were left out of other initiatives.
“My take on it is that it does have some potential, because these are people who don’t qualify under the other relief programs,” he said. “For those folks, this truly is an opportunity that they would not have any access to otherwise.”
Federal mortgage loan relief programs, aimed at refinancing or modifying loans, were limited to those who loans owned by Fannie Mae and Freddie Mac, said Richards.
He said some relief efforts have fallen far short of their goals, and he hopes that isn’t the case with the settlement-related modifications.
Reach David Slade at 937-5552 or Twitter @DSladeNews.