Posted on October 25th, 2008 by Bret Jenkins
Like many, we are carefully reading the tea leaves out their on the broad horizons, especially all things relating to the banking industry and foreclosures.
We believe Bank of America’s announcement earlier this month about a settlement with our Attorney General here in Nevada has positive implications for our real estate market.
Offsetting Foreclosure Headwinds
Bank of America made a formal agreement earlier this month with our Attorney General, Catherine Cortez Masto to make things easier for homeowners under a foreclosure cloud.
As a result of this agreement, approximately 11,000 Nevada Homeowners will keep their homes and avoid a foreclosure based on a tentative agreement between state officials and the Bank of America.
Bank of America Foreclosure Relief
The program is designed to specifically help homeowners who have set up sub prime or pay option adjustable rate mortgages from Countrywide Financial Corp., which Bank of America acquired.
Bank of America has agreed to make loan modifications that would save Nevada homeowners up to $219 Million (approx) through reduced interest payments and for some borrowers, reduced principals. The agreement would also reduce late fees up to $2.2 Million and waive prepayment penalties up to $2.15 Million.
Also, a “soft landing” fund of $4.8 million has been established to help people who need it, if they cannot avoid the impact of foreclosure, in spite of the settlement. Bank of America has also set up a special hotline for consumer with Countrywide loans in place who may need help: 1.800.669.6607. It should be pointed out, the actual pool of impacted consumers has not been selected by Bank of America.
The program is tailored strictly for mortgages for owner occupied homes and it is for sub prime and pay-option ARM (”Adjustable Rate Mortgages) for which the first payment was between January 1, 2004 and December 31, 2007.
