Bank of America has begun processing its first wave of mortgage refinance applications under the US Treasury Department’s making home affordable programme.
The bank has said that the initiative provides new refinance opportunities to homeowners who previously could not qualify. The US Treasury plan allows homeowners with loans owned by Fannie Mae or Freddie Mac who are current with their mortgage payments and whose home value is no more than 105% of the current mortgage, balance the opportunity to refinance their loans.
In its first wave, Bank of America will be able to serve the majority of eligible customers — homeowners whose mortgages are serviced by Bank of America or its wholly owned subsidiary, Countrywide Financial and who do not have mortgage insurance on their current loans. Additional borrowers will be included as systems become operational.
Bank of America has said that eligible homeowners may benefit from refinancing under the plan because of historically low interest rates coupled with guidelines designed to provide increased flexibility: Expanded guidelines for high loan-to-value loans; no mortgage insurance required on loans that did not previously carry mortgage insurance; and no required minimum credit score.
Bank of America is in the process of implementing the Treasury Department’s “home affordable modification” programme for Bank of America and Countrywide customers. In the next two weeks, the company expects to begin offering trial modifications under the plan.
Bank of America has extended its voluntary moratorium on foreclosure of loans that may be eligible for the “home affordable modification” programme until April 30, 2009.
On April 27, 2009, the Bank of America and Countrywide mortgage brands will combine to become Bank of America Home Loans.
Barbara Desoer, president of mortgage, home equity and insurance services at Bank of America, said: Combined with historically low interest rates, this programme has generated significant interest from borrowers seeking the benefit of lower mortgage payments. We are proud to be one of the first lenders to take loans from application to closing under the Treasury’s plan, providing the opportunity for more Americans to save money on their monthly mortgage payments and supporting efforts to stabilise the nation’s housing market.
