New Bank of America foreclosure prevention tactic

[orthofrancis]

Bank of America has taken an extrememly aggressive foreclosure prevention strategy. It will limit mortgage payments to no more than 34% of gross income. My question is – what happens to all of the rest of the money owed? Does BOA just increase the length of the mortgage, or just take the loss? I would think that on some houses, the income would make for rather lengthy payment terms – 90+ year mortgages, where people would just walk.
http://money.cnn.com/2008/10/06/real_estate/Drastic_plan_slashes_mortgage_costs/?postversion=2008100616

Please no party discussion/blame faults, etc. Just keep the discussion to BOA, and how this strategy may, or may not work.

thanks

[lookingagain]

It sounds to me as though BofA will be writing it off. What I would like to see (although it could never happen) is to have all principal write-downs be recorded as sales. Otherwise, those who bought at the inflated prices get the break but those of us who waited out this insanity still have to deal with the absurd prices that sellers still think their home is worth.

[lookingagain]

It sounds to me as though BofA will be writing it off. What I would like to see (although it could never happen) is to have all principal write-downs be recorded as sales. Otherwise, those who bought at the inflated prices get the break but those of us who waited out this insanity still have to deal with the absurd prices that sellers still think their home is worth.

[lookingagain]

It sounds to me as though BofA will be writing it off. What I would like to see (although it could never happen) is to have all principal write-downs be recorded as sales. Otherwise, those who bought at the inflated prices get the break but those of us who waited out this insanity still have to deal with the absurd prices that sellers still think their home is worth.

[lookingagain]

It sounds to me as though BofA will be writing it off. What I would like to see (although it could never happen) is to have all principal write-downs be recorded as sales. Otherwise, those who bought at the inflated prices get the break but those of us who waited out this insanity still have to deal with the absurd prices that sellers still think their home is worth.

[lookingagain]

It sounds to me as though BofA will be writing it off. What I would like to see (although it could never happen) is to have all principal write-downs be recorded as sales. Otherwise, those who bought at the inflated prices get the break but those of us who waited out this insanity still have to deal with the absurd prices that sellers still think their home is worth.

[PadreBrian]

hahah, us guys who waited get funked again.

[PadreBrian]

hahah, us guys who waited get funked again.

[PadreBrian]

hahah, us guys who waited get funked again.

[PadreBrian]

hahah, us guys who waited get funked again.

[PadreBrian]

hahah, us guys who waited get funked again.

[Huckleberry]

My thought on this is BofA announced it will do this because of the litigation and settlement. I’m sure they figure if they state they are voluntarily doing this, they will not be mandated by the govt to do it.

It’s really hard for me to believe the banks would just take the hit (write-off) completely, and just expunge the borrower of the original obligation and lost loan value.

I would speculate they will minimally lower the principal loan amount (from original) and work some sort of deal where they get compensation on the end of the loan. Maybe making new mortgages a 40 or 50 year and the interest fixed a 6.

Here is an article by MM related to how CW/BofA is structuring their mortgage modifications:
http://mrmortgage.ml-implode.com/2008/09/03/countrywidebofa-conspire-against-a-borrower-shareholders/

I’ll bet the new program is along these lines…

[Huckleberry]

My thought on this is BofA announced it will do this because of the litigation and settlement. I’m sure they figure if they state they are voluntarily doing this, they will not be mandated by the govt to do it.

It’s really hard for me to believe the banks would just take the hit (write-off) completely, and just expunge the borrower of the original obligation and lost loan value.

I would speculate they will minimally lower the principal loan amount (from original) and work some sort of deal where they get compensation on the end of the loan. Maybe making new mortgages a 40 or 50 year and the interest fixed a 6.

Here is an article by MM related to how CW/BofA is structuring their mortgage modifications:
http://mrmortgage.ml-implode.com/2008/09/03/countrywidebofa-conspire-against-a-borrower-shareholders/

I’ll bet the new program is along these lines…

[Huckleberry]

My thought on this is BofA announced it will do this because of the litigation and settlement. I’m sure they figure if they state they are voluntarily doing this, they will not be mandated by the govt to do it.

It’s really hard for me to believe the banks would just take the hit (write-off) completely, and just expunge the borrower of the original obligation and lost loan value.

I would speculate they will minimally lower the principal loan amount (from original) and work some sort of deal where they get compensation on the end of the loan. Maybe making new mortgages a 40 or 50 year and the interest fixed a 6.

Here is an article by MM related to how CW/BofA is structuring their mortgage modifications:
http://mrmortgage.ml-implode.com/2008/09/03/countrywidebofa-conspire-against-a-borrower-shareholders/

I’ll bet the new program is along these lines…

[Huckleberry]

My thought on this is BofA announced it will do this because of the litigation and settlement. I’m sure they figure if they state they are voluntarily doing this, they will not be mandated by the govt to do it.

It’s really hard for me to believe the banks would just take the hit (write-off) completely, and just expunge the borrower of the original obligation and lost loan value.

I would speculate they will minimally lower the principal loan amount (from original) and work some sort of deal where they get compensation on the end of the loan. Maybe making new mortgages a 40 or 50 year and the interest fixed a 6.

Here is an article by MM related to how CW/BofA is structuring their mortgage modifications:
http://mrmortgage.ml-implode.com/2008/09/03/countrywidebofa-conspire-against-a-borrower-shareholders/

I’ll bet the new program is along these lines…

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