In an effort to help borrowers with Countrywide subprime and option-ARM mortgages avoid foreclosure, Bank of America created its National Homeownership Retention Program (NHRP), providing mortgage relief to 100,000 eligible homeowners in just 10 months. In the third quarter alone, more than 31,000 customers received assistant through the NHRP, according to the bank’s quarterly progress report.
“The NHRP is one of the proprietary foreclosure prevention programs we use in addition to the federal government-sponsored Home Affordable Modification Program (HAMP),” said Jack Schakett, credit loss mitigation strategies executive for Bank of America home loans. “Through this and other programs, Bank of America has provided relief through completed and trial modifications to more than 600,000 customers since the beginning of last year.”
Bank of America reached an agreement regarding the NHRP with state attorneys general in October 2008, three
months after acquiring Countrywide Financial Corporation. The goal of the program is to provide loan modifications to Countrywide customers with loan products that Bank of America discontinued upon acquiring the company. Nearly 400,000 homeowners across the country were affected by these discontinuations and have been identified as potentially eligible for the NHRP.
From initiation of the NHRP on December 1, 2008 to September 30, 2009, mortgage modification offers were made to 143,271 homeowners, and 80,875 customers received mortgage relief, resulting in potential aggregate principal and interest savings of $1.6 billion. The NHRP progress reports also noted that during this same time, more than 19,500 other NHRP-eligible borrowers entered trial modifications under the federal government’s HAMP. An additional 35,000 NHRP-eligible homeowners entered the HAMP trial period in the six weeks following the close of the reporting period.
As part of the NHRP agreement, relocation assistance and foreclosure relief programs are provided in 41 states and the District of Columbia. Under the terms of the agreement, Bank of America had provided more than $40 million in relocation assistance to customers and tenants in eligible properties that have gone into foreclosure, according to the third-quarter progress report. Additionally, the bank has allocated up to $150 million in funding to participating states, in hopes of providing foreclosure prevention programs and financial relief for eligible borrowers who went into default shortly after taking out a qualifying loan. Borrowers who are eligible for a relief payment have been sent notification letters, and checks will be issued during the first quarter of 2010.