Bank of America launches mortgage program to assist servicemembers
Bank of America ($13.31 0%) introduced programs Thursday that offer mortgage assistance to American military servicemembers beyond active duty.
The bank dedicated a mortgage servicing team that will deal specifically with homeowners who served in the military. The new programs include a principal forgiveness loan modification program for borrowers behind on their payments when they exit active duty. It builds on the Home Affordable Modification Program, but moves principal forgiveness up to the first option in order to reduce the debt level to current market value.
Another program will reduce interest for borrowers with loans serviced and owned by BofA. The bank said Thursday it is speaking with investors to expand the benefits to all military personnel.
Beginning April 1, BofA will also offer 4% interest mortgage originations to active duty military personnel, lower than the 6% mandate under the Servicemembers Civil Relief Act. The interest rate will be available for as long as the borrower serves in active duty and for 12 months after release.
"We recognize the complexity and special considerations of serving customers who are in the military and we are committed to working with the Department of Defense and other stakeholders to help servicemembers who are currently in or exiting active duty and in need of mortgage relief," BofA Executive Vice President Terry Laughlin said.
Laughlin heads up the new default servicing department at BofA. It split off from the banks' home loan division that will continue to service current and performing mortgages.
JPMorgan Chase ($52.99 -0.6399%) came under fire in January for overcharging military personnel on their mortgages and foreclosing on them improperly. Chase responded weeks later and launched programs to assist military borrowers with their mortgages.
Write to Jon Prior.
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