A second chance for homeowners who have been turned down for a Bank of America loan modification has been announced-the new Tier 2 program has much more relaxed guidelines for approval. Borrowers who fell out of their loan mod or who could not meet the strict requirements previously, may now be eligible for a loan workout under this Tier 2 plan. Here is a brief overview of the easier to pass criteria:
- Rental and investment properties are now eligible-a maximum of 4 properties may be modified. Second homes are also allowed, and even previously modified loans may be reviewed again.
- Debt ratio guidelines are looser-Tier 2 uses a range between 25-42% instead of the previous 31% only criteria. This means that if your current mortgage payment
is less than 31%, you may still be eligible for this new program. The monthly payment savings must be at least 10% however. Use the Loan Mod Calculator to show you what your debt ratio and new target payment could be.
- Loans must be originated prior to January 1, 2009 and be less than $729,750 for single unit homes (higher for 2-4 units)
- Financial hardship must still be evident, and loss of home equity alone is not enough to pass. However, principal reductions may be offered if the property is at least 15% underwater.
- NPV calculations are more lenient, and Bank of America may use flexible terms to achieve an affordable modified payment. Use the Loan Mod Calculator to see your Waterfall Results and learn how to fine tune your monthly budget figures to pass the new Tier 2 guidelines. Know how to pass the new guidelines before you apply!
The goal is to help more homeowners qualify for a Bank of America loan mod, and the chance for previously denied homeowners to re-apply opens up another opportunity to apply correctly. Get more free tips and information, visit MyLoanModificationCenter.com today.