Bank Offers Assistance through Home Affordable, Other Home Retention Programs

CALABASAS, Calif., Dec. 7 /PRNewswire/ — Bank of America has provided mortgage relief through concluded and trial modifications to more than 600,000 homeowners since January 2008.

“At Bank of America, we remain focused on providing long-term solutions to help distressed customers sustain homeownership,” said Jack Schakett, credit loss mitigation strategies executive of Bank of America Home Loans. “Through the government’s Home Affordable Modification Program (HAMP) and our own programs, we are moving aggressively to assist as many homeowners as possible.”

The Treasury Department’s most recent Making Home Affordable Program Servicer Performance Report, reflecting activity through October, indicated that Bank of America was responsible for about one in five HAMP trial modifications – leading the industry with the highest number of trial modifications and offers extended. As of the end of November, Bank of America Home Loans had increased to more than 160,000 customers active in a HAMP trial modification.

“As we focus on assisting our customers to successfully convert to permanent modifications, we are making extensive efforts – through phone, mail and face-to-face contact — to help our customers know exactly what documentation is required and the risks of not responding by the government’s program deadlines,” said Schakett.

Bank of America will continue to work with borrowers who cannot meet the requirements for a HAMP modification using its own modification programs, short-term relief or other foreclosure prevention tools that may address their individual situations. Through its established homeownership retention programs, Bank of America has concluded non-HAMP loan modifications for more than 450,000 customers since January 2008, including about 225,000 modifications so far this year.

Bank of America is also the industry leader in the Home Affordable Refinance Program (HARP), the second key component of the Making Home Affordable initiative. Since becoming the first major lender to originate HARP loans last spring, more than 100,000 Bank of America customers who are current on their mortgage payments have benefitted from enhanced loan-to-value ratios or streamlined processes of the HARP program.

In total, through HARP and other programs, Bank of America has provided $215 billion to refinance existing mortgages, helping 949,000 customers save money on their mortgages so far this year.

Emphasis on Improving the Customer Experience

Bank of America has taken major steps to reach eligible homeowners and improve the level of service they receive, including:

• Expansion of default management staffing to 13,000.
• Reassignment of hundreds of mortgage loan officers to serve as case workers to assist customers in the conversion from trial to permanent modifications.
• Launch of a home loans assistance Web site in September to provide customers easy online access to gain answers to their questions about the loan modification process: http://homeloans.bankofamerica.com/homeloanhelp.
• Implementation of a door-to-door campaign to reach borrowers who have not responded to trial modification offers or provided necessary documentation.
• Participation in more than 200 community outreach events in 30 states.
• Sponsorship of the Alliance for Stabilizing Our Communities, the first national multicultural outreach and home retention collaboration with the National Council of La Raza, National Urban League and National Coalition for Asian Pacific American Community Development.
• Piloting the company’s first Customer Assistance Center in Brea, Calif., that provides face-to-face counseling on mortgage and home equity loans, credit card accounts and personal loans.

Bank of America

Bank of America is one of the world’s largest financial institutions, serving individual consumers, small- and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 53 million consumer and small business relationships with 6,000 retail banking offices, more than 18,000 ATMs and award-winning online banking with more than 29 million active users. Bank of America is among the world’s leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to more than 4 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients in more than 150 countries. Bank of America Corporation stock (NYSE: BAC) is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange.

www.bankofamerica.com

SOURCE Bank of America

Housing and mortgage groups were unusually active last week on Capitol Hill, pushing hard for a better tax credit to spur home purchases.

In coordinated lobbying efforts, homebuilders, Realtors, bankers and mortgage companies focused on the Senate, where final details of a nine hundred billion dollar economic stimulus package were being hammered out all week.

Four trade groups sent a joint letter to the Senate Finance Committee, which has responsibility for all tax-related aspects of the stimulus, applauding the committee’s decision to make the existing seven thousand five hundred dollar tax credit nonrepayable as the House Ways and Means Committee voted to do the prior week.

But the amended credit could be improved even more, the groups said, if the Senate makes several additional changes.

Tops on the list: Extend the eligibility period for using the credit from the current deadline of June thirtieth through the end of December.

“If the stimulus bill is signed sometime in February, as anticipated,“ said the groups, “only about four months will remain for the credit to have a meaningful impact. The spring, summer and early fall months are historically the most active seasons for home purchases. Allowing the credit to expire June thirtieth could undermine” the ability of the credit to stimulate potentially hundreds of thousands of sales this year .

The four trade groups, the National Association of Realtors, the National Association of Homebuilders, the Independent Bankers of America and the Mortgage Bankers Association, asked the Senate to take two more steps: expand eligibility to ALL buyers of homes this year — not simply first time purchasers- and authorize a mechanism whereby the seven thousand five hundred dollar credit could be made available as downpayment cash at settlement.

Eliminating the first time buyer restriction would be a huge change. Under the current tax code and the House Democratic stimulus package, only taxpayers who have not owned a home during the previous three years are eligible for the credit. Opening that up to all purchasers -whether moveup buyers, downsizers or first timers would stimulate sales far more — perhaps half a million additional sales — according to some estimates.

Though the four trade groups joined to push for an improved tax credit, they don’t necessarily agree on all aspects of the plan. For example, the National Association of Homebuilders continues to lobby Congress and the Obama administration for a ten percent credit up to twenty-two thousand dollars available to all 2009 purchasers.

Kenneth R. Harney

NEW YORK (CNNMoney.com) — President-elect Barack Obama launched his campaign Monday for a massive package of tax cuts and spending proposals aimed at reviving an economy mired in recession.

Obama met with congressional leaders from both parties. He is also planning to deliver a major speech on the economy on Thursday, a senior Democratic official told CNN.

“The reason I’m here today is that we are going to present our latest ideas to Congress,” Obama said. “We expect them to begin this week on this process.”

The president-elect will propose roughly $300 billion in tax cuts for individuals and businesses. He has not publicly put a price tag on his overall stimulus plan, though his advisers have said they expect it to fall between $675 billion and $775 billion, 40% of which would be in tax cuts.

According to an Obama spokesman, several tax breaks are under serious consideration.

Middle-class tax cut: Obama would offer a tax cut equal to $500 a year for individuals and $1,000 for couples. The credit would work essentially as a payroll tax credit, meaning the money could be delivered fairly quickly. Companies could simply reduce the tax they withhold from employees’ paychecks.

The tax credit is likely to be offered only to those below a certain income level, but the Obama team hasn’t specified where the cut-off point would be. The credit also would be refundable, meaning that even tax filers without any tax liability — typically very low-income workers — would receive one.

The credit is similar to one Obama proposed during the campaign.

“What’s required for the economy right now [is] to put more money into the pockets of ordinary Americans who are more insecure about their jobs, who are continuing to see rising costs in an area like health care, who are struggling to make ends meet,” he said Monday.

Business break for losses: Obama is considering a tax break for businesses that book losses in 2008 and 2009.

The stimulus plan may extend what’s called the net-operating loss carryback to five years, up from two years currently. The provision lets companies apply their losses to past and future tax bills so that they can get money back on taxes they’ve already paid or would otherwise have to pay.

Job creation: Obama would establish a new credit for businesses that either create jobs in the United States or avoid layoffs.

Small business write-off: Obama would increase the amount of expenses small businesses can write off to $250,000 in 2009 and 2010, up from $125,000 currently.

While political observers believe the now-added emphasis on business tax cuts as a major part of a stimulus package is one way the Obama team hopes to attract Republican support, that’s not how the Obama camp sees it.

“We’re working with Congress to develop a tax-cut package based on a simple principle – what will have the biggest and most immediate impact on creating private sector jobs and strengthening the middle class. We’re guided by what works, not by any ideology or special interests,” an Obama spokesperson told CNNMoney.com in an e-mail.

Obama on Monday said it’s “very important to have a balanced recovery and reinvestment package.”

In his weekly radio and video address on Saturday, Obama offered a broad stroke sketch his proposal, which he called the American Recovery and Reinvestment Plan. In addition to a tax cut for workers, he said he would propose to:

• double renewable energy production and make public buildings more energy efficient;
• rebuild crumbling roads, bridges and schools;
• computerize the health care system;
• and modernize classrooms, labs and libraries.

“Economists from across the political spectrum agree that if we don’t act swiftly and boldly, we could see a much deeper economic downturn,” Obama said. “That’s why we need an American Recovery and Reinvestment Plan that not only creates jobs in the short-term but spurs economic growth and competitiveness in the long-term.”

The main goal of his plan: to create 3 million new jobs. Most would come from the private sector, he said.

As Obama prepares to take office on Jan. 20, the country faces a series of severe economic and political challenges.

Nearly 2 million jobs were lost in the first 11 months of 2008 – the final government reading on the employment picture will be released on Friday – and the economy has stagnated. Investors suffered the worst year in stocks since the Great Depression, and foreclosures are rising while housing values are declining at record paces.

Virtually every state is facing a budget shortfall, forcing many to make plans to cut back on critical services and raise taxes.

To that end, Obama’s advisers and lawmakers have said they expect his legislation to provide increased aid to states to pay for Medicaid, as well as a boost to unemployment benefits.

Many economists have called for stimulus spending to approach or even exceed $1 trillion if the government expects to successfully beat back one of the deepest downturns in more than two generations.

Some Democrats and Republicans have already raised red flags about the scope of Obama’s proposals and the prospect of a rushed attempt to pass the legislation, which would be the most expensive spending bill in U.S. history.

The congressional timeline for the stimulus plan is not clear, nor has Obama provided an official blueprint to Congress.

“The urgency of this, everyone knows about,” said Senate Majority Leader Harry Reid, D-Nev., said on NBC’s “Meet the Press” on Sunday. “But I’m not going to have some false deadline [on it], whether it’s February 1 or whatever it is. I want to make sure that all senators have some input in what goes on here and that we do it as quickly as we can.”

A sharp debate is likely over several crucial questions. Will the proposed measures in fact boost the economy? What’s the right balance between seeding short-term stimulus versus funding long-term projects? Will money intended to yield long-term dividends for the economy as a whole end up merely serving politically motivated agendas or pet projects?

Obama attempted to assuage some of those concerns on Saturday when he called for “vigorous oversight and strict accountability for achieving results.” He stressed that his plan is not an attempt to “throw money” at the economy’s problems.

“I am optimistic that if we come together to seek solutions that advance not the interests of any party, or the agenda of any one group, but the aspirations of all Americans, then we will meet the challenges of our time just as previous generations have met the challenges of theirs,” Obama said.

A new measure to provide extra help for homeowners struggling to pay mortgages after losing their jobs comes into force today.

The measure, announced last year, was introduced by the Government to stem the rising number of repossessions.

The waiting period to qualify for the means-tested benefit has been reduced from 39 to 13 weeks from today – a move brought forward from April.

Others will qualify for help making interest payments after the terms to qualify for such assistance were changed.

More people will now be eligible to receive Support for Mortgage Interest (SMI) after mortgages of up to £200,000 were included, double the previous limit and £30,000 higher than the previously planned increase.

Work and pensions secretary James Purnell told Sky News:”It comes as part of a raft of measures aimed at helping people stay in their homes.

“If there are two earners in the household and one of them loses their job, being able to renegotiate your payments down for two years, you can get through this difficult period.”

Gordon Brown on Sunday promised to help people who face losing their homes in the recession, and conceded the downturn could last two years.

The SMI scheme provides mortgage relief to those who are already receiving a means tested benefit, such as income support, pension credit or income-based jobseekers allowance.

The Council of Mortgage Lenders (CML) estimates that the number of repossessions will soar to 75,000 next year as rising unemployment leaves growing numbers unable to meet interest payments.

A second scheme is being finalised to allow householders to defer a proportion of their mortgage interest payments for up to two years.

NEW YORK (CNNMoney.com) — Home prices posted another record decline in October, falling 18% compared with a year earlier, according to a closely watched report released Tuesday.

The 20-city S&P Case-Shiller index has posted losses for a staggering 27 months in a row. In October, 14 of the 20 cities set fresh price decline records.

“The bear market continues; home prices are back to their March 2004 levels,” says David Blitzer, Chairman of the Index Committee at Standard & Poor’s.

Sunbelt cities suffered the most, but most of the country is watching home values fall. Home prices in Phoenix, Las Vegas and San Francisco all fell more than 30% on a year-over-year basis. Miami, Los Angeles and San Diego recorded year-over-year declines of 29%, 28% and 27%, respectively.

“As of October 2008, the 20-City Composite is down 23.4%,” said Blitzer. “In October, we also saw three new markets enter the ‘double-digit’ club.”

Atlanta, Seattle and Portland each reported annual rates of decline of about 10%.

“While not yet experiencing as severe a contraction as in the Sunbelt, it seems the Pacific Northwest and Mid-Atlantic South is not immune to the overall demise in the housing market,” Blitzer added.

Many of the factors affecting home prices turned strongly negative this fall, according to Blitzer.

“October was really the first month to feel the full brunt of the credit crunch,” he said. “Up until the Lehman Brothers [bankruptcy filing on September 15], everyone felt relatively optimistic.”

Plus, in many of the free-falling cities the majority of real estate sales consist of distressed properties such as foreclosed homes and short sales. These houses tend to sell at a steep discount to the rest of the market, and when they account for a large proportion of all sales, they can exaggerate the depth of price declines.

Of course, foreclosures continue to be a big problem as well. In October alone, nearly 85,000 people lost their homes to foreclosure, adding vacant inventory to an already overburdened market.

Home sellers should not expect prices to improve any time soon, according to Pat Newport, a real estate analyst for IHS Global Insight.

“I expect it’s going to get quite a bit worse over the next couple of months,” he said. “Existing home sales reports have really been bad.”

Home sales fell 8.6% in November, much more than expected, to an annualized rate of 4.49 million units according to the National Association of Realtors.

And although interest rates are currently extremely low - the 30-year fixed-rate averaged 5.14% during the week of December 24, according to mortgage giant Freddie Mac (FRE, Fortune 500) - that’s doing more to help people refinancing existing mortgages than it is to help new home buyers.

“Buyers still have to have a 20% down payment,” said Newport, “and, in this environment, it can be hard to meet that criteria.”

The latest Case-Shiller numbers provide more ammunition to Washington policy makers who want to do more to fix the housing mess, according to Jaret Seiberg, an analyst with the Stanford Group, the policy research firm.

“These data just add to the tremendous pressure on the president-elect and the Democrats to stimulate housing,” he said. “That means more lucrative tax incentives and broad foreclosure prevention. All of this will likely be in the stimulus plan that Congress adopts in January.”

Nicholas Retsinas, Director of Harvard University’s Joint Center for Housing Studies, agrees. “Housing problems are at the core of our economic problems,” he said, “yet, of the government interventions made during 2008, few were focused on housing.”

With a new administration and Congress in place next month, he expects to see a renewed interest in stabilizing the housing market.