As part of Bank of America’s deal in the national mortgage settlement, the bank announced Friday it plans on offering full forgiveness for second liens to certain homeowners.
The bank is in the process of mailing about 150,000 letters to pre-qualified homeowners with offers to wipe out their second liens.
The vast majority of customers who are eligible for the program are behind on their second mortgage, but some borrowers who are current on their second lien can qualify if they are associated with a first lien that is severely delinquent and meets the program criteria.
The intention of the program is to reduce monthly debt obligations for homeowners and help borrowers stay in their home.
Eligible customers must also have a second lien owned and serviced by BofA, and they must also meet certain threshold delinquency or property value criteria.
BofA sent letters through Federal Express or certified mail, and only those who receive the letter are eligible.
Customers can decline the offer within 30 days of receiving the letter.
BofA also reminded customers that forgiven mortgage debt is taxable. While the Mortgage Debt Relief Act of 2007, which is set to expire at the end of this year, does allow for forgiven debt related to a foreclosure to be exempt as taxable income, BofA urged customers to seek advice from a tax professional.
Source DSNews By : Esther Cho
