Bank of America plans to waive mortgage payments for up to nine months for those jobless and collecting unemployment benefits, according to the Charlotte Observer.
There’s a bit of a catch though: borrowers must agree to hand over the house if they’re unable to find a job within those nine months.
Of course, BofA would give soon-to-be former homeowners $2,000 for relocation costs if they failed to get back on their feet during that time.
If the new job was lower paying than the original, BofA would consider a loan modification to make mortgage payments more sustainable.
The proposed program must still meet accounting and regulatory guidelines, as mortgage lenders are required to write down the value of a loan if the modified payment plan lasts beyond three months.
But BofA doesn’t see it as a “modification.” Will federal regulators see it that way too? Stay tuned…
Before turning things around recently, the banking giant had only completed 98 permanent loan modifications under the program, so image is clearly at stake.
The company also recently launched an earned principal forgiveness program for underwater borrowers, whereby homeowners will earn principal reductions by making on-time payments over time.