David Streitfeld, a reporter for the New York Times reported in the recent article, Banks go easy on some borrowers, that millions of Americans are struggling with foreclosures and are seeing little relief. However, big banks, such as Bank of America and JP Morgan Chase are offering borrowers who are not in default offers to cut their debt and or easing the mortgage terms on their loans. It appears that JP Morgan Bank and Bank of America are quietly modifying loans for tens of thousands of borrowers who have not asked for help but who the banks believe to be at special risk.
Some of the Banks appear to be proactively over hauling loans for borrowers who have the Option ARM loans. These loans allow borrowers the option of skipping the principal payment and some interest payments for an introductory period of several years. The unpaid balance would be added to the body of the loan. These are the loans that became popular in the late stages of the housing boom but which bank now consider to be potentially troublesome.
JP Chase and Bank of America and other big lenders are currently negotiating with the Obama administration and the attorneys general over foreclosures.
The Banks are taking the position that cutting mortgage balances would be unfair to borrowers who remain current as well as impractical because so many loans are securitize into pools owned by investors. Brian Moynihan, Bank of America's chief executive told the attorneys general that cutting mortgage balances would send the wrong message to borrowers who have been struggling to pay their mortgages. Jamie Dimon, of JP Morgan Chase bluntly stated that Chase would not be reducing the principal balances.
Bank of America and Chase are not doing enough to help borrowers. Borrowers want to stay in their homes.
Hopefully, the Banks will realize that it is would be wise to help struggling homeowners now before it is too late. Sacramento bankruptcy attorneys can help you stay in your home.
