| Re: B of A Loan mod application - Help
I haven't heard of anyone here reporting principal reductions with B of A. The structure of the modification offer that was discussed is in line with what a lot of us have gotten - low rate for 5 years and then back to our original (and reasonable) interest rates.
On paper, the modification is good. Would this result in an affordable payment for you? If so, then the principal reduction isn't necessary for a workable modification.
If B of A can offer you a modification that makes your loan affordable without a principal reduction, then they have zero incentive to reduce your principal. After all, why should they offer to lose money right away if they can both keep the original loan balance and make it affordable for you? If there is no combination of lower interest rate and extended loan terms that can make your payments affordable, then B of A might consider a principal reduction.
Keep in mind that without a reduced principal balance, it will a long time before you have any equity in your home again, unless the housing market in Corona explodes again (which is highly unlikely). If you end up having to move in the next several years, you would still be faced with a short sale situation. |