First some good news, if you’ve got an underwater mortgage owned by Bank of America.
BofA has come to a separate agreement with the US government to to help reduce some the fines it owes to the Housing and Urban Development Agency from last month’s huge settlement.
Bank of America has agreed to cut the principal of more than 200,000 underwater loans, and they are cutting them by an even larger amount than the other 4 banks. In exchange they’ll owe about $850 million less in fines.
If you’re a Bank of America customer (and the loan has to be owned by them, Fannie and Freddie loans don’t count) and you qualify, you will have the opportunity to cut your mortgage balance to your home’s current value.
The reductions will average more than $100,000, according to the Wall Street Journal. This is big news because the settlement only promises to reduce the principal of eligible loans to 125% of their current value.
Bottom line, that’s 200,00 homeowners who won’t be underwater anymore and will have a real chance of staying in their homes. But I wish the other banks would step up and follow Bank of America’s lead.
Now here comes the bad news, for Florida homeowners facing foreclosure. We could be seeing a return to the days of Florida’s infamous ‘rocket docket’ if the state legislature approves a one time $4 million stipend which will allow Florida’s court to hire more judges and case managers for the foreclosure courts.