Bank of America says it is the first mortgage servicer to sign an agreement formally committing to participation in the pending second-lien component of the federal government's Home Affordable Modification Program (HAMP). The formal action follows a verbal commitment to the program made by Bank of America's CEO, Brian Moynihan, during a meeting with Treasury Secretary Timothy Geithner earlier this month.
Bank of America has systems in place to begin implementing the Second Lien Modification Program (2MP) with the release of the final program policies and guidelines by federal regulatory agencies, which is expected soon. 2MP will require modifications that reduce the monthly payments on qualifying home equity loans and lines of credit under certain conditions, including completion of a HAMP modification on the first mortgage on the property.
‘For many homeowners facing severe financial difficulty, decreasing the payment on the first mortgage without a reduction in the payment on the second lien may not produce an affordable combined mortgage payment,’ says Barbara Desoer, president of Bank of America Home Loans.
As the nation's largest mortgage servicer – nearly 14 million loans, including approximately 3 million second liens – the bank's participation in 2MP is noteworthy. Bank of America says it will modify eligible second liens regardless of whether the first lien is serviced by Bank of America or another participating servicer.
SOURCE: Bank of America