Bank of America is making mortgage headlines again by introducing three new loan modification improvements that are specifically designed to assistant military personnel who are behind on their house payments. The three new changes are:
- A program designed to help reduce principal on loans for military members who are behind on their payments when leaving active duty.
- A new 4% mortgage for members who are eligible for SCRA (Servicemember Civil Relief Act) protection.
- The creation of a special customer service department that specializes in working with military customers.
Bank of America wants to specifically help military members who are coming off active duty and find themselves behind on their mortgage. The mortgage giant wants to follow the example of HAMP (Home Affordable Modification Program) and offer several different levels of solutions to help customers.
Bank of America Home Loans
Bank of America will first be able to reduce the principal owed on a mortgage and then, as needed, will also attempt to reduce the interest rate and terms of the loan.
Additionally, Bank of America will reduce mortgage rates for active-duty military personnel to 4% instead of the standard 6% mandated by the SCRA program. The reduced 4% mortgage rate will stay in effect for one year after coming off active duty.
Bank of America is essentially taking the Servicemember’s Civil Relief Act (SCRA) and beefing it up a little bit when it comes to the mortgage protections provided by the act. The SCRA is designed to ease some financial burdens on family members who have one or more service members on active duty.
Bank of America Mortgage Modifications for Military Personnel
It does this by protecting service members from eviction while on active duty, helps prevent foreclosures while on active duty and even limits the interest rate that active duty service members can pay on credit card debt that was incurred prior to being called to serve.
Normally the SCRA is only available to active duty service members and then terminates anywhere between 30 to 90 days after ending active duty, but Bank of America’s principal reduction program extends this to 12 months. Details of the SCRA can be found on the official Servicemember’s Civil Relief Act overview page.
These new solutions will be available to customers starting on April 1st. Bank of America will only be able to offer these loan modifications to mortgages it services but is working to extend it to mortgages owned by other mortgage services. The new military customer service department will consist of employees who are specially trained in the SCRA program. The Bank of America military customer service unit can be reached by calling 888-325-5357.
Overall, Bank of America’s modifications and the creation of a new customer service department should prove to be a good thing for service members who are struggling with home loans.
Once Bank of America’s program goes into place other banks will surely follow their lead and begin understanding that the SCRA does a lot of good but doesn’t always go far enough. To be competitive you can expect other banks to also make their own special military personnel programs and even establish their own military customer service areas in the future.