BankAmerica announces Action to Slow Foreclosures!

BankAmerica announced late today an unprecedented initiative to modify mortgages for borrowers facing foreclosure.  No bank or institution of any kind, has ever attempted such a massive undertaking.

http://money.cnn.com/2008/10/06/real_estate/Drastic_plan_slashes_mortgage_costs/index.htm?postversion=2008100616

BankAmerica didn't willing do this.  It was part of a settlement with 11 states (1 being Michigan) concerning a lawsuit over Countrywide predatory lending practices.  BankAmerica recently bought Countywide. 

The initiative is expected to help an estimated 400,000 homeowners struggling to make their mortgage payments and keep their homes.  BankAmerica will use computers to identify those that qualify for the offer and is training staff in hopes of being able to handle the massive undertaking.  Homeowners may see their interest rates frozen, lowered or maybe even see their amounts owed cut.

The move is also seen as potentially saving BankAmerica unknown losses due to foreclosing on all the delinquent homeowners.  It's hoped other banks will fallow suit in light of the Fed's recently announced $700 billion bailout.

We may be seeing the turning point in foreclosures and the resulting falling values of real estate.  If less foreclosed properties hit the market, the number of properties for sale will fall and price should stabilize, breaking the downward spiral the real estate market has been in for the last 2 years.

Keep your fingers crossed as the BankAmerica program is supposed to kickoff in December, just in time for a Merry Christmas for many homeowners!