Mortgage Servicing Fraud
occurs post loan origination when mortgage servicers use false statements and book-keeping entries, fabricated assignments, forged signatures and utter counterfeit intangible Notes to take a homeowner's property and equity.
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BofA to start reducing mortgage principal

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CHARLOTTE, N.C. (AP) -- Bank of America Corp. is giving some of its most troubled mortgage borrowers relief from the threat of foreclosure.

The bank, the largest mortgage servicer in the country, said Wednesday it will forgive up to 30 percent of some customers' total mortgage balance. The homeowners must have missed at least two months of mortgage payments and owe at least 20 percent more than their home is currently worth.

The plan is the newest provision of an agreement the Charlotte, N.C.-based bank reached 18 months ago with state attorneys general to settle charges over high-risk loans made by Countrywide Financial Corp.

The loans were made before Bank of America acquired the mortgage lender in mid-2008. Bank of America has since stopped making those loans.

Although the motivation for Bank of America's announcement was to resolve legal problems, it has the potential of setting a precedent for other banks to also start forgiving principal on loans that are in danger of failing. Bank of America is the nation's largest bank, and it's among the first to take a systematic approach to reducing mortgage principal when home values drop well below the amount owed.

The Treasury Department, which already has a mortgage modification program, is developing similar plans for principal reductions at other mortgage servicers, according to industry officials speaking on condition of anonymity because they were not authorized to discuss the conversations. They said an announcement could come in the next few months.

"They're talking about doing something and talking seriously about it," Julia Gordon, senior policy counsel at the Center for Responsible Lending, a consumer group, said of Treasury officials. "I think the concern now is fairness and making sure that the public understands the importance of principal reductions toward stabilizing the housing market and helping everybody."

A spokeswoman from JPMorgan Chase & Co. declined to comment on whether it planned a similar program. Representatives from Citigroup Inc. and Wells Fargo & Co. were not immediately available.

Bank of America's announcement came as another report pointed to continuing problems in the housing market. The government said new home sales dropped to a record low last month, a day after the National Association of Realtors said sales previously occupied homes also fell in February, the third straight monthly decline.

Millions of homes have gone into foreclosure since the housing market collapsed in late 2007. The loans affected by Bank of America's announcement include certain subprime and option adjustable rate mortgages. Option ARMs allow borrowers to start with minimal monthly payments that actually increase the loan's balance.

The borrowers who can take advantage of the Bank of America program must also qualify for the Obama administration's $75 billion mortgage loan modification program.

Bank of America estimates that about 45,000 customers will qualify for its plan.

The offer will cut total reduced principal by about $3 billion. That could lower the bank's earnings, which have already been hurt by consumers' continuing defaults on mortgage and credit card loans. Bank of America was among the hardest hit by the credit crisis and recession.

It's not clear how big a financial hit Bank of America will take by reducing mortgages. But the move will likely be less costly than having homeowners walk out on their mortgages or opt to do a short sale, banking analyst Bert Ely said. A short sale happens when a seller owes more than the house is worth, and the lender is willing to accept less than the mortgage balance.

"This is about loss minimization," Ely said. "There's going to be losses (for Bank of America). The question is what's the easiest way out."

The plan does carry risks. For starters, borrowers who aren't 60 days behind on their mortgages may stop making payments so they can qualify. The more borrowers who try to qualify, the bigger the potential loss for Bank of America. The bank will also have to absorb the costs of renegotiating the loans.

Even so, "the move helps create the best prospect of avoiding a further downward home price spiral, which would result in even deeper losses" for the bank, said Howard Glaser, a mortgage industry consultant, in an e-mail.

Investors appeared pleased with the news, and sent Bank of America shares up 44 cents, or 2.6 percent, to close Wednesday at $17.57.

According to new plan, which begins in May, Bank of America will first offer to set aside a portion of the principal balance, interest free. That principal can be forgiven over five years, if homeowners don't miss any payments. The maximum decrease in principal will be 30 percent.

The forgiveness allows a homeowner to bring a mortgage balance back down to 100 percent of the home's value, the bank said.

Glaser said that if the Obama administration launches a similar effort for the entire industry, that would be a "major shift in loan modification efforts."

Lenders including Bank of America have been criticized for not helping enough borrowers to complete the Obama administration's $75 billion mortgage modification program, which is widely viewed as a disappointment. Only 170,000 homeowners have completed the program so far.

As of last month, Bank of America had completed modifications for about 22,000 homeowners, or about 8 percent of those signed up. That compares with about 12 percent for Wells Fargo and 11 percent for both JPMorgan Chase and Citigroup.

The mortgage modification program does not address the problems of borrowers who are considered underwater, or owing more than their homes are worth.

The Treasury Department estimates that 1.5 million to 2 million homeowners will complete the program by the end of 2012, about half of the original goal. A report issued late Tuesday by Neil Barofsky, the special inspector general for the Troubled Asset Relief Program, says numerous changes to government guidelines "caused confusion and delay" and said the government did not do enough to advertise the program.

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    These are BOA Countrywide loans. In many cases they don't have the
paperwork to foreclose on these loans so they trick the person into taking
out a new loan (they call it a modification). If you ask to see the original
note on the old loan, they'll just tell you not to worry about it, they'll take
care of everything.
     The fact is the Countrywide borrower won the "death gamble" because
Countrywide "died" without assigning the Note and Mortgage so the Note
is unenforceable, but the gullible sheeple just say "oh how nice, they're
modifying my loan", when in fact they own their property "free and clear"
but don't realize it. After the "modification" they are in debt to BOA.

WAKE UP AMERICA!  MORT-GAGE = "Death-Gamble"  Gager in French=gamble
in this bet, who ever dies first loses, sometimes its the bank! If you won it
fair and square, don't let a "pretender lender" steal your winnings!
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LMAO!!  Yeah, they'll make a few puny token gestures, send 'em right over to the media and then go right back to plundering and pillaging at will.

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Appears to be an honorable gesture but it's still making a criminal, a treasonous one at that a civil issue. If contracts were made with Countrywide how did Bank of America obtain the note and right to foreclose?

Jail time and write downs or charge offs are the right and lawful thing to do.

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