It's no secret the government's Home Affordable Modification Program has been a big disappointment so far. Very few troubled mortgages have been modified, and consumers frequently complain that servicers have been less than helpful.
Now Bank of America has signed an agreement, formally committing to participation in the pending second-lien component of the federal government's HAMP, the first major servicer to do so.
The company said it has systems in place to begin implementing the Second Lien Modification Program (2MP) with the release of final program policies and guidelines by federal regulatory agencies, which is expected soon. 2MP will require modifications that reduce the monthly payments on qualifying home equity loans and lines of credit under certain conditions, including completion of a HAMP modification on the first mortgage on the property.
"For many homeowners facing severe financial difficulty, decreasing the payment on the first mortgage without a reduction in the payment on the second lien may not produce an affordable combined mortgage payment," said Barbara Desoer, president of Bank of America Home Loans. "We continue to work with elected officials and policymakers on sound approaches to helping struggling homeowners keep their homes in these difficult economic times."
"Signing this contract ahead of the release of the final program guidelines is a continued demonstration of Bank of America's strong overall commitment to homeownership retention and to the Making Home Affordable program as the centerpiece of these efforts," Desoer said.
Complaints
While that may be true, Bank of America has drawn its share of complaints from homeowners trying in vain to negotiate mortgage modifications. In fact, this week one homeowner, Levirt of Florissant, Mo., wrote to ConsumerAffairs.com claiming that Bank of America was "deceptive" in handling his loan modification.
"My account was placed in forbearance in April 2009," he told ConsumerAffairs.com. "I was told that while my account was placed in forbearance I would not accrue any late fees. I was also told that my request for modification would be complete in 3 months. I was told my credit rating would not be affected. I found later that this was all untrue. Bank of America tacked on over $10,000 worth of interest charges as well as causing me to owe an additional $4,000.00 in back escrow. When I contacted Bank of America everyone I talked to had a negative attitude."
Levirt said his loan modification was signed last month, but that now he owes more, and has a higher monthly payment, than before the modification.
Bank of America, thanks to its acquisition of Countrywide Financial, is the nation's largest mortgage servicer, with nearly 14 million loans.
