The February Settlement With Banks Saves House From Foreclosure at Eleventh Hour

The February Settlement With Banks Saves House From Foreclosure at Eleventh Hour – The February settlement between the mega banks and the governments at both federal and state levels saved the house of a couple from the jaws of foreclosure at the eleventh hour. Bank of America withdrew from the auction of the house of Tamera Hewlett Vellejo and her spouse Tom and then came forward to reduce the housing loan by over $85,000; their rate of interest was to go down from 6.7% to 4.6%. As a result their monthly commitment would be reduced by $770.
They were among the first to benefit from the windfalls of the mortgage settlement. As per the terms of the deal nearly a million of the home owners would have the principal of their housing loan cut down by nearly $100,000.
In early March this year BofA said it had marked out over 200,000 borrowers who were eligible for reduction in principal. The bank has not yet contacted these house owners but said it would start sending out intimation within a week or so said the bank’s spokesperson Rick Simon. It is hoping to reach the most qualified homeowners for this benefit within the next six months.
But another small cluster of house owners, including the Vallejo couple are either in the queue for modification or for foreclosure; the bank has already contacted them.
The house of the Vellejo’s was set to be sold at an auction on Monday at 9.30 a.m. early in March. Hewlett Vallejo said, “We literally went to Church on Sunday praying for help”. But on auction day they found that their unit had not been listed. Few hours later an official of the bank told them that they had become eligible for reduction of principal as per the settlement. Hewlett Vallejo started to cry.
The couple had purchased their cottage having three bedrooms in 2001 for something below $240,000. In the middle of the property boom when the value of their house had soared to over $430,000 they refinanced so as avail of a lower interest rate and to use the cash for making improvements to their home.
But things got bumpy when a commercial property deal in which Tamera had invested failed and litigation cropped up. They soon began to default on their housing loan. In 2010 September their commitments including fees caused their dues to shoot up to $385,000; meanwhile the value of their property had gone down by over 30% to be valued at $300,000. Since then for two years they have been trying to get BofA to modify the housing loan but the bank kept parrying and postponing. Then the miracle happened.