Bank of America has completed about 56,400 permanent mortgage modifications under the Home Affordable Modification Program (HAMP), and has now completed a total of more than 600,000 modifications through all available programs since January 2008, the company says.
The bank was able to convert almost 24,000 loans from trial modifications to permanent modifications in April, completing the process for more borrowers than in any previous month, says Jack Schakett, Bank of America Home Loans' credit loss mitigation strategies executive.
‘We continue to evaluate homeowners' eligibility and activate trial modifications while focusing on completing as many permanent modifications as possible for those who have successfully completed their trial-payment period," Schakett explains. "At the same time, however, we are beginning to see a decrease in the number of active trial modifications, which we have anticipated.’
In part, this slowing in active trials reflects successful conversions to completed modifications and the implementation of new government requirements for documentation of financial information before a borrower can enter the trial modification period.
In addition, as required by government guidelines, Bank of America says it is notifying customers who did not meet eligibility requirements for HAMP or who did not meet the requirements of their trial-period plan that they are not eligible to complete a permanent HAMP modification. The bank is in the process of mailing letters to thousands of these customers.
‘We are letting customers know that we may explore other homeownership retention options, depending on individual circumstances and investor guidelines,’ Schakett adds.
Bank of America has completed nearly 550,000 modifications outside of HAMP since January 2008, more than 59,000 of which were completed in the first four months of this year.
Implementation of recently announced enhancements to Bank of America's National Homeownership Retention Programs will begin soon, the company says. The "earned" principal-forgiveness approach, announced in March, targets types of loans that have demonstrated the highest risk of default by using principal reduction as the first step toward reaching an affordable payment through modification.
Bank of America says it is completing plans to align this program with features of a similar earned principal-forgiveness plan recently announced by the Department of the Treasury as part of HAMP, ahead of broader implementation of the government program in the coming months.
SOURCE: Bank of America