Bank Of America homeowners may be able to benefit from a principal reduction on their mortgage if they owe more on their home than it’s worth. Underwater mortgages have been on the rise over the past few months, causing trouble for lenders and homeowners, but initiatives like principal reductions from the Obama Administration may help homeowners that are struggling in their mortgage.
Principal reductions from lenders like Bank of America would help homeowners by lowering the principal on their mortgage, over a specific amount of time, as long as they make their mortgage payments on time.
Homeowners that are experiencing an underwater mortgage are growing frustrated as they feel there is no way to recoup the losses from the devaluation on their home, so many have been choosing to just walk away from their mortgage obligation. These principal reduction plans are hoped to keep homeowners in their homes and making mortgage payments rather than walking away.
However, Bank of America homeowners should remember that, just as with the home loan modification program, lenders are not going to be perfect in the implementation of these principal reductions. Not every homeowner that wants a principal reduction will get one, but you should just be aware that these principal reductions are available.