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Tuesday, October 4, 2011

Rating Bank of America's Mortgage Loan Modification Performance

Rating Bank of America's Performance
Under the Federal Goverment's Mortgage
Loan Modification Program (HAMP)


Click here to watch a 2 minute video summary: Bank of America's HAMP Performance


Bank of America's performance in assisting distressed homeowners was ranked as one of the worst among large mortgage loan servicers, according to the Federal Government's most recent report. The Making Homes Affordable ("MHA") Final Report for the second quarter of 2011 states that BOA's performance is in need of "substantial" improvement. Let's take a closer look at how BOA performed in five (5) key categories, with all the information below based on conclusions by the Federal Government.


1. Did BOA effectively follow guidelines for identifying and contacting homeowners who may be eligible for the Home Affordable Modification Program ("HAMP")? No. BOA did not meet the required standards, with moderate improvement needed.


2. Did BOA effectively follow guidelines for evaluating and assisting homeowners? No. BOA did not meet the required standards, with moderate improvement needed.


3. Did BOA effectively follow guidelines for general program management, program data reporting, and program compliance? No. BOA did not meet the required standards, with moderate improvement needed.


4. How often did BOA make errors greater than 5% in calculating the homeowner applicant's income (a crucial factor in determining eligibility for a HAMP mortgage loan modification)? This occurred 13.2% of the time, placing BOA into the worst category, with substantial improvement needed.


5. How often did the Federal Government disagree with BOA as to whether a homeowner was eligible for a permanent HAMP mortgage loan modification? The Government disagreed with BOA on this issue only 0.8% of the time and concluded that BOA was performing adequately by this measurement. Additionally, 8.2% of the time, the Government was unable to determine whether BOA made the correct determination on a homeowner’s eligibility.


Conclusion: President Obama's administration has concluded that BOA requires substantial improvement in its performance as a mortgage loan servicer participating in HAMP, and that the Federal Government will withhold incentives until improvement is shown. (We wonder if BOA would be discussing the monthly debit card fee if they were going to receive the financial incentives.)


McGrath & Spielberger provides legal services in an attempt to assist borrowers seeking mortgage loan modifications or other mortgage - related relief.