Bank of America is preparing to launch a program that would give unemployed borrowers an opportunity to stay in their homes payment-free for up to nine months, the Charlotte Observer reported Sunday.
According to the Observer, the program will only be open to borrowers who receive unemployment benefits. To qualify, borrowers must agree to sign over their deeds if they are unable to obtain re-employment within the nine-month period. Bank of America will additionally provide borrowers $2,000 to cover relocation expenses.
‘If they don't get a job, it's not going to work out to save their home, [and] they will at least have built up some cash,’ Jack Schakett, the bank's loss mit strategies executive, told the paper. ‘It's not as good as staying in their home, but they at least will be financially able to settle themselves in another home, to make the transition more dignified.’
The Treasury last month announced a mandatory forbearance program under HAMP that provides unemployed borrowers with assistance for between three and six months. But in a report Tuesday, the Troubled Asset Relief Program Special Inspector General recommended the Treasury consider lengthening the term of its forbearance plan, citing Labor Bureau statistics that show the average length of reported unemployment is 31.2 weeks. An earlier proposal put forth by a Mortgage Bankers Association working group also suggested a longer assistance period of nine months.
SOURCE: Charlotte Observer