Thursday, March 31, 2011

New military programs offered by Bank of America

Bank of America intends to create a new program to assist military homeowners, in light of the recent stories of military members being denied their rights under the Servicemembers' Civil Relief Act (SCRA), a spokesman said on Feb. 10, 2011. Recent articles in the Army Times and the Wall Street Journal, illustrate the new programs are finally coming to light.�

Effective April 1, 2011, the following new programs will go into effect:

1.�� �Reduced Interest Rates on Mortgages.� The SCRA requires interest rates on loans secured prior to a service member's active duty status be reduced to 6% upon application for SCRA protection.� Bank of America has announced they will reduce interest rates on mortgages entered into prior to active-duty service be reduced to 4%.

���� a.�� �Applies for the entire term of active-duty service and for 12 months upon release from active-duty service.� At the end of this period, the interest rate will then revert to the pre-SCRA protected rate, and

���� b.�� �Goes into effect for April 2011mortgage payments, and

���� c.�� �Applies only to mortgages which are owned by Bank of America.� If your mortgage is only serviced by Bank of America, the 4% reduced interest rate will not apply.� (For example, if your original loan is with a bank other than Bank of America, and then you were notified that your loan was sold to Bank of America, this means that Bank of America only services your loan and the original bank from whom you obtained the loan technically owns it.)

2.�� �New Customer Service Team for Military Members.� A special customer service team is being established to handle military loans, and can be contacted at 888-325-5357. �

3.�� �Reduced Principal Balances.� For military members about to leave active-duty service, and thereby lose their protection under SCRA, Bank of America will work to assist those members having difficulty making their mortgage payments with several options:�

��� a.�� �Forgiveness of a portion of the outstanding balance still owed, or

��� b.�� �A reduction in the outstanding principal balances to "as low as 100% of the current market value," or

��� c.�� �Additional reduced interest rates, or

��� d.�� �Extended repayment periods. �

��� e.�� �However, this only applies to loans which are owned by Bank of America and will not apply to service members who must relocate as a result of PCS orders.

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