Bank of America Home Loans has taken an early lead in the second part of the Home Affordable Modification Program.
The Calabasas, Calif.-based mortgage company said today that it has become first servicer to sign an agreement formally committing to participate in the pending second-lien component of HAMP.
BoA Chief Executive Officer Brian Moynihan verbally committed to the Second Lien Modification Program during a meeting earlier this month with U.S. Treasury Secretary Timothy Geithner, the statement said.
Policies and guidelines for the program are expected to soon be released by federal regulators. BoA noted that it has systems in place to begin implementation of the program.
“2MP will require modifications that reduce the monthly payments on qualifying home equity loans and lines-of-credit under certain conditions, including completion of a HAMP modification on the first mortgage on the property,” BoA said. “As the nation’s largest mortgage servicer — nearly 14 million loans, including approximately 3 million second liens — the bank’s participation in 2MP is particularly noteworthy.”
Barbara Desoer, president of the home loans and insurance group, said in the statement that “decreasing the payment on the first mortgage without a reduction in the payment on the second lien may not produce an affordable combined mortgage payment.”
