Federal Loan Modification through Bank of America

By: Timothy McFarlin | Published: June 23rd, 2010 | Category: Loan Modification

A borrower of Bank of America seeking federal loan modification assistance can request the assistance directly through the lender because Bank of America is a participant in President Obama’s Home Affordable Modification Program (HAMP).  Applying for a loan modification under the terms outlined in HAMP is as easy as filling out an application available from any lender participating in the program.  This means that if a borrower of Bank of America lives closer to a Wells Fargo, the borrower can pick up the necessary application forms, and even drop off the necessary application forms, to the Wells Fargo location.  Along with the application forms, a few other personal financial documents will need to be submitted.

In order to be approved for a federal loan modification, the borrower must meet certain requirements as outlined here: www.MakingHomeAffordable.gov.  Borrowers can rest assured that the information found on this site is legitimate because the site is maintained and operated by the federal government, which is evident by the “.gov” at the end of the web address.  Any information pertaining to federal loan modifications found on this site is free and is the same information that hundreds of other sites will require payment to view.

When a person applies for a federal loan modification, the federal government does not actually take control of the loan or services the loan in any way; rather the government offers various incentives to lenders to modify troubled loans.  For example, if a person applied for a federal loan modification through Bank of America, and the lender suffered a loss by modifying the loan, the federal government would compensate Bank of America for their loss.

In theory, the plan sounds like a good idea since homeowners get an affordable mortgage and lenders don’t lose as much money as they would by foreclosing on the property.  Not only that, but property values surrounding the struggling homeowners don’t drop, counties don’t lose tax revenue, and money is pretty much saved all around.  Unfortunately, various practices by lenders across the country have caused the program to be less of a success than originally thought.  Borrowers consistently complain about the lack of communication and support they receive from lenders like Bank of America and claim that paperwork has been lost, calls have been dropped, and customer service agents have offered little to no assistance overall.  Borrowers claim that they have been told one thing on the phone by one person, only to be the complete opposite by another person.

The courts have started to take notice of consumer complaints and some consumer protection groups are spearheading lawsuits against lenders who are failing to perform, but progress seems just out of reach for borrowers facing foreclosure now.

Some lenders have been accused of flat out lying to their borrowers, claiming that loans will be modified if certain conditions are met, only to fail to modify the loan and instead continue the pursuit of foreclosure on the property in question.  While it is true that the federal government has taken more of an interest in the lending industry than ever before, the progress being made by way of federal loan modification programs has yet to justify bail outs and tax expenses to struggling homeowners.

Just because the federal government and the lenders are failing to perform, it does not mean that borrowers are completely out of hope.  Every day, foreclosure and real estate attorneys are fighting (and winning) small battles against big lenders on behalf of their clients in court rooms and conference rooms across the United States.  These attorneys are armed with the legal knowledge and the negotiation skills necessary to compel lenders to reconsider their actions and better accommodate their borrowers.  After all, it wasn’t the borrowers who brought down the mortgage industry; it was the lenders who issued hundreds of thousands of loans that they knew were destined to fail, all for the sake of lining their pockets.  Any borrower who is facing foreclosure is urged to secure legal counsel who can offer specific legal representation tailored to their specific situation.  Borrowers being represented by experienced attorneys are more likely to be granted a fair loan modification than those who are not.

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