Bank of America Prepares Mortgage Write Downs in California

March 29, 2011 (Jeff Alan)
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Bank of America has announced that they will begin soliciting homeowners who are eligible for mortgage prinicipal write downs as part of the Treasury Department’s Hardest Hit Fund being implemented through the California Housing Finance Agency (CalHFA).

The state has received almost $700 million in funds as part of the Obama Administrations Hardest Hit Fund which provides additional funds for anti-foreclosure programs in the states that have been hardest by the current economic downturn.

As part of that program, Bank of America is beginning a pilot program allowing some California homeowners the opportunity to receive mortgage principal write downs.

A spokesperson for CalHFA said that there is no set funding limit at this time for the amount of loans that Bank of America is targeting “unless they blow us out of the water.”

“We’re really excited to get the program going,” the CalHFA spokesperson said.

CalHFA is in talks with other mortgage lenders and mortgage servicers and reports that they have also recruited Ally Financial and Guild Mortgage Company to participate in the mortgage principal write down program.

Bank of America announced at the beginning of March that it was ready to launch a similar program in Arizona and that they were finalizing plans with the state of Nevada to provide a mortgage principal reduction program there too. The state of Arizona hoped to be able to provide assistance for up to 8,000 homeowners.

“Since the Obama administration established the Hardest Hit Fund initiative one year ago, Bank of America has worked closely with both the Department of Treasury and state housing agencies to design and implement the program to provide interim payment assistance to unemployed borrowers, as well as funding for loan modification assistance to delinquent borrowers,” said Terry Laughlin, head of Bank of America’s Legacy Asset Servicing.

Tags: Bank of America, Hardest Hit Fund, CalHFA, anti-foreclosure programs, economic downturn, mortgage principal write downs, loan modification

Sources:
HousingWire.com
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