Loan Modification Program Series 2: Countrywide (Bank of America) Homeowner Retention Program
The program began December 1, 2008 and has no specified end date. This program will systematically modify troubled mortgages with up to $8.4 billion in interest rate and principle reductions. To be eligible for the program, borrowers must have received a qualifying subprime mortgage or a pay-option adjustable rte mortgage prior to December 31, 2007.
Other requirements:
- The borrower is 60 days or more delinquent
- The borrower is current today but becomes 60 days or more delinquent prior to June 30, 2012
- The borrower has a subprime hybrid ARM and is likely to become 60 days or more delinquent as a consequence of a rate reset
- The borrower has a pay-option ARM and is likely to become 60 days or more delinquent as a consequence of a rate reset or payment recast
- Modifications would be designed to achieve sustainable payments at a 34% debt-to-income (DTI) ratio of principal, interest, taxes and insurance.
- The current loan-to-value (LTV) ratio is 75% or greater
If a borrower qualifies for the program, Countrywide (Bank of America) will waive late/delinquency fees for missed payment and when possible will waive prepayment penalties whether or not the new loan is originated with Countrywide. Prior to modifying and existing loan, Countrywide (Bank of America) will first offer to refinance the borrower under the HOPE Program. If the borrower is not eligible for the HOPE program, Countrywide (Bank of America) will offer one of these programs based on product type:
Subprime 2,3,5,7 and 10-year hybrid ARM
- Borrowers will receive an extension/restoration of the introductory rate for five years. If the Borrower cannot afford this rate, they will be considered on a streamlined basis for a five-year rate reduction to as low as 3.5% and a conversion to a fixed-rate mortgage at the end of five years.
Pay-option ARM- The negative amortization feature will be eliminated from the loan, the mortgage rate will be reduced to as low as 2.5%, and the loan will be converted into a fixed-rate mortgage or a ten-year interest-only loan. On single property owners with no equity, the principal balance will be written-down to as low as 95% of the current value of the property.
Subprime Fixed-Rate
- The mortgage rate will be reduced to as low as 2.5% and the loan will be converted into a fixed-rate or a 10-year interest only loan.
For more information,
contact the Homeownership Retention Division at (800) 669-6650.
Related Topics:
Series 1: CitiGroup/CitiMortgage Program
Hope Now Program
Should you have any questions or need further information,
please don’t hesitate to contact me,(775) 220-1630
Or visit my blog at www.SellingNorthernNV.com
Joshua Talayka
Chase International
Office: 775 850 5900
Toll Free: 877 922 5900
Cell: 775 220 1630
Fax: 775 850 5901
985 Damonte Ranch Pkwy, Ste. 110
Reno, Nevada (NV) 89521
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I have received paperwork from Country Wide about the homeownership retention program…looks simple…just sign and for the next 5 years they lower your interest to the rate that it was before it started to adjust…no fees, no prepayment penelties,..etc…
After doing some research..Im concerened that I am signing on to the Hope for Homeowners program…if so…that requires 50% equity sharing with FHA at the time of selling my home…are you kidding me? Do you know anything about this?
Im worried
thanks
Joy
if the loan modification program is indeed the HOPE now program, then the equity sharing would apply as follows:
Equity Sharing. In order to avoid a windfall to the borrower created by the new 90% loan-to-value FHA-insured mortgage, the borrower must share the newly-created equity and future appreciation equally with FHA. This obligation will continue until the borrower sells the home or refinances the FHA-insured mortgage. Moreover, the homeowner’s access to the newly created equity will be phased-in over 5 years.
Although this may have you worried, it’s not as bad as it sounds. First and foremost, it is probably still a better option then your alternatives. Secondly, Chances are that in today’s market, that you currently do not have any equity even after the modification. However as the market does improve, and you begin to accumulate equity in your property, you will probably wish to refinance your loan to avoid any further equity sharing.
The documents given to you by countrywide should outline all the terms of the loan modification, and explain whether the modification is part of the HOPE Now program