BofA Begins Refinancing Under 'Making Home Affordable' Plan
Bank of America Corp. (BAC) announced Thursday that it has started processing its first wave of mortgage refinance applications under the Administration's new "Making Home Affordable" program, which provides refinance opportunities to homeowners who previously could not qualify. "[T]his program has generated significant interest from borrowers seeking the benefit of lower mortgage payments," said Barbara Desoer, president of Bank of America Mortgage, Home Equity and Insurance Services. "In just one month since announcing this program, nearly 200,000 homeowners have contacted us to determine their eligibility for refinancing." The U.S. Treasury plan allows homeowners with loans owned by Fannie Mae (FNM) or Freddie Mac (FRE), who are current with their mortgage payments and whose home value is no more than 105 percent of the current mortgage balance, the opportunity to refinance their loans. The program's guidelines are designed to provide increased flexibility, such as expanded guidelines for high loan-to-value loans, no mortgage insurance requirement for loans not previously carrying insurance and no required minimum credit score. Under the Treasury's plan, anywhere from 7 to 9 million homeowners could refinance into lower mortgage rates, President Barack Obama said before a White House housing finance roundtable early Thursday. With mortgage rates hovering at historic lows and borrowers facing potential yearly savings of about $2,000, there have already been "extraordinary jumps" seen in refinance activity, Obama said, according to various MarketWatch bulletins. In its first wave of refinances, Bank of America will be able to serve the majority of eligible customers - homeowners whose mortgages are serviced by Bank of America or Countrywide and who do not have mortgage insurance on their current loans. Additional borrowers will be included as systems become operational, the company said in a press release. Bank of America also said it's in the process of implementing the Treasury Department's "Home Affordable Modification" program for Bank of America and Countrywide customers. In the next two weeks, the company expects to begin offering trial modifications under the plan. Bank of America has extended its voluntary moratorium on the foreclosure of loans that may be eligible for the "Home Affordable Modification" program until April 30, 2009. Write to Kelly Curran at email@example.com. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.