Bank of America $17 Billion Mortgage Settlement
by Sandra C. from Boise, ID
Ask Kate about Bank of America $17 billion mortgage settlement: Sandra's mortgage was caught up in the unlawful conduct of Bank of America (BoA) for which they received a $17 billion penalty during the summer of 2014. As a result, eligible borrowers were to get relief in the form of principal reductions, mortgage modifications, and new affordable financing. Except, yup, Sandra has heard nuttin' as 2015 draws to a close. Keep reading for a closer look at the settlement and what to do if your mortgage has slipped through the cracks.
Ask Kate: Bank of America $17 Billion Mortgage Settlement - Where's My Principal Reduction? Where's My Loan Modification? By Sandra C. from Boise, ID
I purchased my home in the fall of 2008, financing it with Bank of America. My loan was sold to Countrywide before the court ruling. Then again to another lender.
My home's value dropped 40 percent! I became very ill. I regret very much not being able to work! But now I'm on disability and every penny counts.
How do I go about getting my principal reduction? I owe $118,000.00. My payments are $788.00 a month. With 80 percent of the payment going to interest! Where is my principal reduction?
I hope you can help. I appreciate ALL of your useful information, and appreciate the time you give. We are fortunate to have your knowledge assist us. Thank you!
Sandra, in Boise ID
FYI - Bank of America never responded to my letters requesting proof of B of A's original financial documents. They just stonewalled me and sold the loan. That is still fraud!
***zz-portrait-left.shtml*** Kate's Answer: Bank of America $17 Billion Mortgage Settlement - Where's My Principal Reduction? Where's My Loan Modification?
In August 2014, Bank of America was clobbered by the Department of Justice with a $17 billion penalty for its role in inflating the housing bubble.
That's a lot of zeros, a sum of money greater than most of us will ever see or possess in our lifetimes.
But according to many critics, the penalty should have been greater taking into consideration the widespread patterns of fraud, corruption, and discrimination under which the 2nd largest bank in the country operated as well as Countrywide Financial that was purchased by BoA.
I realize some have argued that BoA should not be punished for Countrywide Financial's past. But that's the deal when one corporation buys another. You take on the good and the bad.
Which Homeowners Will Benefit and How
Under the terms of the settlement, principal mortgage balance reductions and modification of loan terms are be made to eligible borrowers. BoA must also provide new affordable financing to home buyers. All in all, about $7 billion goes toward these efforts.
So sorry to have to add this - Not all struggling homeowners whose mortgages were originated by Countrywide and Bank of America will benefit from this settlement. Only mortgages held in Bank of America's portfolio are said to be eligible as opposed to those that are backed by Fannie Mae and Freddie Mac.
Where does the rest of the settlement go, I hear you asking. Almost $10 billion will go toward settling claims of illegal conduct and fraud related to residential mortgage-backed securities.
Where Do Borrowers Go for Help
Notices to eligible borrowers were supposed to be issued in the fourth quarter of 2015.
If the process is as jumbled as the 2013 National Mortgage Settlement
, I suppose we should not be overly shocked by a lack of promptness.
Even worse, homeowners who cannot get answers are told to call Bank of America (huh?) at 877-488-7814. But as I've said before, this is like running to the fox for help after a hen house raid.
I also urge you to contact your state's current Attorney General for assistance if you feel your mortgage has been overlooked. At the end of this letter, I'll add a list of other organizations that you can lean on for answers and action.
And by the way, remember that part about mortgages backed by Fannie Mae and Freddie Mac not being included in the settlement? Until we know absolutely for sure that this is the case, I wouldn't give up yet.
While it's true that BoA was given an incentive to offer or complete the consumer relief aspect of the settlement by August 2015, who know what will transpire between now and 2018 when the settlement must be finalized.
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