It’s a bold move, for a country that’s still clearly reeling from the devastating hit to nearly every real estate market within its borders. And a recent CNN article draws attention to what one U.S. giant is doing to continue to try and curb the seemingly insurmountable number of foreclosures, and help Americans get back on their feet.
Have a read, as it gives some interesting food for thought as to the state (no pun intended) of where the major lenders are at right now. Ultimately, the threat of, “borrowers (being) more likely to walk away if their mortgages are underwater, meaning they owe more than the home is worth,” has prompted the Bank of America to not only re-think it’s damage control strategy, but also try a tactic seemingly unprecedented until this point.
And with, “nearly 25% of borrowers are underwater, according to First American CoreLogic, Bank of America is launching the program to entice more borrowers to participate in its foreclosure prevention efforts and to reduce the chance of re-default.”
Read through the better part of the article and these alarming stats jump out at you:
“The settlement called for Bank of America, which acquired Countrywide in July 2008, to modify troubled mortgages with up to $8.4 billion in interest rate and principal reductions for nearly 400,000 Countrywide customers.
The bank expects that 45,000 borrowers will qualify to have their loan balances reduced by a total of $3 billion under the program announced Wednesday. It is set to begin in May.”
Again, this may or may not be a surprise to some. But the numbers are still rather shocking.
What about the neighbour who has been dutifully paying his mortgage through all this?
What are your thoughts on this issue? Should the BOA re-think their strategy?
Comments
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By Pjrowbot, April 12, 2010 @ 7:07 pm
Wanting to see your neighbour kicked out of their home because you’ve been making your payments is just petty. Get over it.
Respectfully, I think you missed the point. The overall economy would be in a free fall if people who are paying their mortgage dutifully decide “well if he can stay in the house AND get a writedown of his mortgage balance without paying then I am also going to stop paying now.”
By Alyson Thiessen, April 18, 2010 @ 2:47 pm
Clearly a good news story is not on the horizon. There is still major ground to cover in this economy.
By Pjrowbot, August 31, 2010 @ 4:16 pm
What you just describe above IS PETTY. I don’t care if it’s ‘economics’. Respectfully of course, I think it is you that is missing the bigger point.