Bank of America Loan Modification: Why Bank of America is Different

The Bank of America loan modification program is a bit different from most. The lender, being a financial institution, is not going through financial troubles like many of the other banks and lenders. They are, on the contrary, experiencing the greatest level of regulation from the Office of Thrift Supervision.

The difference between them and other lenders is that a majority of the Bank of America modification program is going to require the homeowner to make no less than three consecutive, and to maintain the monthly mortgage payments up to 100% of the homeowner’s gross monthly income.

What this will mean for the homeowner is that if your mortgage is currently $1,000 per month and you are paying $1,200, the bank is going to require you to come up with $1,300 in order to continue to pay the mortgage with them. You’re left with a $1,300 a month hole to fill when you’re unable to pay before, or.

Bank of America Loan Modification Application

This may make it for the homeowners very difficult to commit to the terms of their loan. They will require an extensive financial statement detailing the homeowner’s financial status, income, and expenses. Each needs to be submitted in full together with a hardship letter.

Bank of America Loan Modification Requirements

As well, they are going to require a certain percentage of the homeowner’s monthly mortgage payment to stay part of their gross income. This is a tough one, as homeowners across the country are suffering reductions in their income. Bank of America, in most cases, says 1/3 of their monthly gross income should remain in order to maintain their loan.

At least some of those whose income has decreased will find it difficult to meet their loan obligations. The primary goal at hand is to keep the homeowner in their home; therefore, the conditions of their loan modification are absolute must be met or the application will not be considered.

Bank of America Loan Modification Requirements:

  1. The homeowner must live on the property as a primary residence.
  2. The property must be for the homeowner and the homeowner alone.
  3. The first remaining monthly payment for the mortgage must be more than 31% of the homeowner’s gross income. (Offers received prior to May 31, 2009, will show lower percentages). A clearer explanation is provided online by Bank of America at
  4. The homeowner’s mortgage payment must not be more than 40% of their gross monthly income.
  5. A homeowner’s mortgage payments cannot exceed their income-to-debt ratio and their total family income.

Homeowners can apply for a loan modification directly from their lender. There are many requirements that must be met to qualify, including proof of gross income, proof of financial mismanagement, and the ability to make their new payment with a new payment. Homeowners may also have to uncover financial statements that prove the homeowner’s ability to pay the modified payment.

Hardship Letter: Each Bank of America loan modification has certain criteria that must be met in order to apply. This is a very important document as it explains the circumstances leading to the homeowner’s application. This is a letter of proof that the homeowner has circumstances putting their current mortgage payments into hardship. Financial hardship can be due to a host of different circumstances, but common hardships are:

  1. Unavoidable payroll-cuts
  2. Unemployment
  3. Divorce or Separation?
  4. Medical bills or overextended credit card use.
  5. The death of a spouse or family member
  6. Death of a co-borrower or family member
  7. Incarceration
  8. Job relocation or loss of income

The application process has a lot to do with the way the application is written. It must fit the Bank of America guidelines and the homeowner’s specific financial situation. There are a lot of other details about the loan modification application process that should be considered before homeowners make this process their last attempt to avoid foreclosure from Bank of America. A lie on your application is never in your best interest. Bank of America and the government are on your side as they are doing you a huge favour.

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