Bank of America is one of the largest mortgage servicing companies in the United States. If you have a Countrywide Home Loan, now you will be dealing with B of A since they bought Countrywide last year. They also by far have the most loan modification requests currently in process due to this economic crisis. But many homeowners simply do not know, or are confused on how the process works for a loan modification through Bank of America.

Bank of America may have some strict requirements to obtain a loan modification, but it is definitely possible to achieve as I have seen over and over again. If you are simply able to afford your home and just not your loan, you may be eligible for assistance.

If you qualify, a loan modification may allow you to catch up on late payments to become current, help lower monthly interest rate, or even possibly change the original terms of the loan completely. Also if you are one of many with a subprime or an option arm mortgage it may be easier for you to get out of the loan into a better fixed rate loan. Most lenders will help you get out of these loans as soon as possible because of all the predatory lending that was involved in the original loan application.

Remember not all the time modifications will result in a lower monthly payment. Depending on how delinquent you are on your mortgage, BofA may offer to waive the past due months and allow you to catch up and become current on your loan. They may also offer what is called a forbearance agreement which is also typically for homeowners who have fallen behind on their payments.

This agreement is usually only for a short amount of time (3-6) months. What this will do is allow the borrower to have “no” payment for these few months or even a significantly lowered payment during this period of time. After the agreement is completed the borrower will become current and continue on his regular mortgage payments. If you feel this is perfect in your situation make sure you request this from Bank of America when applying for the loan modification.

It is also important to be aware that Bank of America is one of the major participating lenders in Obama’s new loan modification programs. The new programs main goal is to help reduce the homeowners monthly payment in order for the payment to not exceed 31% of the borrower’s gross monthly income. This new payment of 31% will include other mortgage expenses as well such as principle, interest, mortgage insurance, property taxes, and HOA dues. But in order to qualify for these programs you are required to meet these guidelines:

  • The property must be your primary residence
  • Your loan amount can not exceed a balance more than $729,750
  • You must have got the loan prior to January 1,2009
  • Your current monthly payment must be over 31% of your gross monthly income

But even if you do qualify under these guidelines you must realize that there are still other factors involved as well. You must also prove to the lender that you can and will be able to pay the new modified monthly payment. To do this you will be required to prepare and submit all of your financial information including; your most recent paystubs, bank statements, tax returns, etc.

When you first initially contact your lender for assistance you should have an idea of what kind of loan and payment you can afford that will fit your monthly budget. Also when first applying for a loan modification make sure you understand the process as much as possible and are ready to negoitate your loan with confidence. Always be polite and kind, but firm at the same time. Remember they are the ones helping you get into an affordable mortgage and are not required to do so.

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Moe Bedard
Founder at LoanSafe.org
My name is Maurice "Moe" Bedard. I am the founder of America's #1 Mortgage Forum, LoanSafe.org. My online work has been featured in the New York Times, LA Times, Fox Business, and many other media publications. I currently live in Carlsbad, California with my beautiful wife and children.

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