Bank of America is among the five largest lenders that settled with the government in 2012 and set up provisions to make mortgage modification easier for borrowers wanting to avoid foreclosure. Bank of America offers both in-house and government-sponsored loan modification programs. Whether Bank of America will modify your mortgage depends on how able you are to meet eligibility requirements and supply the necessary documentation to support your financial hardship.
Bank of America Program Eligibility
In order to be eligible for a mortgage modification, Bank of America requires that you meet certain criteria. You must be behind on your mortgage by at least 60 days. You must have a financial hardship that has reduced your income and be able to provide supporting documentation. While you must show financial hardship, you must also be able to show consistent income in order to make future modified loan payments. Bank of America requires that the home undergo an interior inspection and an appraisal. Any additional borrowers on the loan must also agree to participate in the mortgage modification.
Mortgage Modification Process
To start the process, Bank of America requires you to call a designated number found on its website. A representative will discuss your income, household expenses, pre-tax income and your financial hardship. If you meet the lender's eligibility requirements, Bank of America will send a financial information packet with the forms you'll need to apply for a loan modification. Bank of America states that it will make a decision approximately 30 days after receiving your complete submission packet. If your application is approved, you'll be placed in a trial mortgage modification plan for a minimum of three month before your modification is made permanent.
Bank of America Financial Packet
While Bank of America gives little detail as to the contents of the financial packet requirements on its website, expect to submit a hardship letter discussing your financial situation. Additionally, if your reduced income is due to the loss of a co-borrower or spouse, expect to provide documentation supporting your financial hardship with a death certificate, or a divorce or separation decree. Bank of America, like other lenders, will require you to provide proof of income or unemployment, and of Social Security or disability benefits. If you've become temporarily or permanently disabled, you'll want to supply Bank of America with a copy of a doctor's statement or medical records. Sending a complete package is important, since any delays could slow down the approval process, and Bank of America won't evaluate your loan without all the necessary documentation.
Bank of America Mortgage Modification Controversy
Bank of America is one of the "Big Five" large banks cited and fined in 2012 by the government for mortgage-related disputes, such as making mortgage modifications difficult for borrowers. NBC News also reported that Bank of America employees have made allegations against the lender, saying they were rewarded for pushing borrowers to foreclose instead of modifying their mortgages. While there are no guarantees that Bank of America will modify your mortgage, a strong financial packet and a timely response to additional requests will allow you to move forward in the loan modification process.