Bank of America has begun providing its Clarity Commitment, a one-page summary of key loan terms, to customers entering permanent mortgage modifications under the government's Home Affordable Modification Program (HAMP).
The bank also plans to offer the Clarity Commitment with loan modifications made under any non-government program in the coming weeks.
The Clarity Commitment for HAMP loan modifications summarizes the following:
- the new principal balance and all charges included in it;
- the new interest rate;
- the total monthly payment at the outset of the loan and, if applicable, at each point that the rate and payment will adjust through the life of the loan;
- the initial amount of any escrow payment included for such things as taxes and insurance, with an explanation that these charges may change during the life of the loan; and
- on eligible HAMP modifications, the incentive payments homeowners may earn toward reducing their principal balance if they make timely payments over the first five years.
SOURCE: Bank of America