Bank of America has recently implemented a loan forgiveness program and reached out, to an estimated, 10,000 of their most at-risk mortgage borrowers, to tell them about it. Bank of America has become the US’ biggest “mortgage servicer.” They anticipate the first wave of modifications to launch by the end of the month.
BOA’s most recent assistance was in March, when they introduced a plan to reduce the mortgage principal by 30%—for homeowners remiss in payments by at least two months; and owe 20% or greater, than their home’s actual value.
Bank of America’s relief plan calls for a portion of the principal to be forgiven over three to five years, depending on the position of the borrower. In order to remain eligible, the borrower is not allowed to miss any monthly payments.
BOA’s program is projected to assist roughly 45,000 borrowers within the next few years. While there’s no telling how much the bank itself is in line to lose, however, it also put aside funds for a good number of the delinquent loans. As well, the Feds are expected to pay 18% of the forgiven principal for at least three years.
Bank of America presently serves numbers of people in, and throughout, over 150 countries. Two years ago, BOA’s purchase of Merrill Lynch made it the world’s largest, and perhaps most connected (maintains relationships with an estimated 99% of Fortune 500 countries) wealth manager and investment banker. As of fall last year, BOA was holding nearly 12.2% of all the US’ deposits.