Bank of America Expands its National Homeownership Retention Program to Increase Payment Affordability and Sustainability for More Customers

Bank of America Home Loans is enhancing the National Homeownership Retention Program (NHRP) it launched in 2008. The NHRP mortgage modification program is designed to offer an affordable and sustainable mortgage payment to eligible customers who have a financial hardship. Several enhancements will be added to the program in mid-May to provide payment affordability and sustainability to more customers.

The program changes are designed to encourage greater customer participation in and successful completion of Bank of America's homeownership retention programs. Bank of America Home Loans developed and launched the NHRP in 2008, in cooperation with state attorneys general, to provide assistance to Countrywide borrowers with certain subprime and Pay-Option adjustable rate mortgages. Bank of America discontinued them from the Countrywide product line upon acquiring Countrywide in July 2008.

The National Homeownership Retention Program is one of several programs that Bank of America Home Loans is using to help customers who are facing financial hardship to make their mortgage payments. These programs are designed to help our customers get an affordable, sustainable mortgage payment so they can stay in their home.

Exactly what will Bank of America offer to eligible borrowers?
Bank of America Home Loans offers a range of modification solutions for distressed customers. The National Homeowner Retention Program is a program for customers with subprime loans, Pay-Option ARM loans or two-year hybrid loans who meet program requirements. Other options are the federal government's Home Affordable Modification Program (HAMP) or other programs that provide an affordable monthly mortgage payment based on the customer's specific circumstances. Modifications will provide more affordable payments using a combination of the following:

• Reducing interest rate
• Providing a term extension
• Providing principal forgiveness or principal forbearance

Once the enhancements are launched, Bank of America Home Loans will both mail and call all eligible customers to collect the necessary information and determine if they qualify for the enhancements to mortgage modification under the National Homeownership Retention Program.

How do I apply or find out if I am eligible?
Visit the Bank of America website if you would like to determine your eligibility. Bank of America Home Loans will also be contacting eligible customers to see if they are interested in applying for the program.

When will the program start or go into effect?
The program is already in effect, and we will add the enhancements in mid-May. You can find additional information about the NHRP at the Bank of America website.

How will the National Homeownership Retention Program use earned principal forgiveness to make my mortgage payment more affordable?
The National Homeownership Retention Program (NHRP) looks at each customer's situation and determines how we can provide you with an affordable mortgage payment. Depending on your situation, the NHRP may use principal forgiveness to do this. The NHRP may offer principal forbearance or earned principal forgiveness.

Principal forbearance delays the repayment of principal. This means after demonstrating a hardship, Bank of America Home Loans will defer or postpone your mortgage payment for a period of time. For purposes of NHRP and HAMP, Bank of America Home Loans offers interest-free forbearance to qualifying borrowers for the life of the loan. At the end of the loan term or at the time the loan is paid off through sale or refinancing, any remaining forborne amount becomes due.

You may also qualify for earned principal forgiveness where a portion of the debt or loan amount is waived and you are no longer responsible to pay back that amount. However, you must remain in good standing on your payments or you will not receive forgiveness. The principal forgiveness occurs over five years. The amount of principal forgiveness that you can earn remains the same for the first three years. In the fourth and fifth years, the amount of forgiveness may be less, if an increase in the property value since the modification was made would result in your principal balance dropping below the current value of the property. Please note: there may be tax implications. You may want to consult a tax professional regarding your individual tax situation.

I wanted principal forgiveness when I was reviewed for a modification and I didn't get it. How do I get it now?
All Bank of America Home Loans modification solutions are designed to bring a loan payment to an affordable and reasonable amount that borrowers are able to sustain over time. If you have completed a loan modification or are currently in a trial period for a modification, your loan likely received a rate reduction and/or term extension in order to achieve an affordable and reasonable payment. Principal forgiveness is another tool to achieve this same result. In addition, under the federal government's Making Home Affordable program, you can only qualify for one modification, so if you are in a trial period plan or a permanent modification, you would not qualify for another HAMP modification.

However, as we get closer to implementation, we will consider the application of the principal reduction enhancements to potentially eligible trial and permanent modifications, and will notify eligible borrowers accordingly.

I am in my Trial Period and have not received my final modification yet. How do I get a principal forgiveness too?
If you are currently in a trial modification, a solution to bring your mortgage to an affordable and reasonable payment has been achieved, assuming you successfully complete your trial and qualify for a permanent modification, and no additional tools (including principal forgiveness) would be necessary. We encourage you to continue making timely payments and to return all required, completed documents to ensure your trial will convert to a permanent modification, as you cannot be considered for another MHA modification if you do not fulfill your trial modification requirements. Should you qualify for principal forgiveness we will notify you and update your modification accordingly.

However, as we get closer to implementation, we will consider the application of the principal reduction enhancements to potentially eligible trial and permanent modifications, and will notify eligible borrowers accordingly.

How long will Bank of America Home Loans offer this program?
The program has been extended until December 31, 2012, six months longer than the original program date.

Updated March 26, 2009