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Friday, March 11, 2011

Bank of America Introduces Mortgage Relief Program to Military Servicemembers

Yesterday, Bank of America announced programs for its mortgage customers serving in the United States military, improving key benefits for those on active duty and extending mortgage protections for servicemembers beyond active duty.

The newly introduced programs include a principal forgiveness loan modification program for military borrowers behind on their payments when leaving active duty; a reduced 4 percent interest rate on mortgages for customers who are eligible for Servicemembers Civil Relief Act (SCRA) protection; and a mortgage customer service unit dedicated to servicing military customers.

Bank of America's Military Loan Modification Program assists military customers who are leaving active duty domestically or abroad and are struggling to afford their mortgage payment. The program builds on the government's Home Affordable Modification Program (HAMP) and provides a number of solutions starting with principal reduction measures to help customers achieve a more affordable mortgage payment as set forth in the HAMP guidelines:
  • First, immediate principal forgiveness to reduce the amounts owed related to their mortgage to as low as 100 percent of the current market value.
  • Then, as needed, a reduction of the interest rate, and subsequent extension of the term of the loan to help customers achieve a more affordable mortgage payment.
Beginning April 1, 2011, Bank of America will also offer a 4 percent interest rate on mortgages for active duty military personnel while they are under Servicemembers Civil Relief Act (SCRA) protection. The 4 percent rate will be applicable for the duration of the borrowers' active duty and for 12 months after release.

Bank of America initially will offer the specialized loan modification program and reduced interest rate to distressed military customers with loans owned and serviced by the bank. The bank is engaged in conversations with investors in other mortgages it services in the interest of expanding these benefits to all the military customers. Participation by those investors is subject to their approval.

Bank of America previously announced it has established a dedicated customer service team for military customers within its mortgage servicing unit. This unit provides servicemembers who have Bank of America mortgages with a single team to contact for assistance with questions or needs related to the bank's full range of mortgage options and related SCRA benefits.

Servicemembers with Bank of America mortgages may reach the dedicated customer service unit at 888.325.5357.