Oct 15, 2008 10:12 am US/Pacific
Foreclosures Rate On The Decline In The Bay Area
SAN FRANCISCO (CBS 5 / KCBS) ―
The number of foreclosure notices sent out in the 9 Bay Area counties dropped 80 percent in the past month, in part because banks have become more willing to work out new terms that allow borrowers in over their heads to stay in their homes.
Bank of America has reworked 170,000 home loans so far this year. The bank has also reached a deal with the attorneys general in California and 13 states to make another 400,000 loan modifications nationwide for customers of CountryWide, which it acquired in July.
If borrowers think they're going to have trouble because of changing circumstances such as losing a job, "they should call us then, before they become deficient so we can discuss with them what payment they could afford in the near future, and we can modify the loan to fit that need," said spokesman Terry Francisco.
Francisco said Bank of America would take drastic steps to modify sub-prime and payment option adjustable rate mortgages so that the borrower's mortgage debt to income ratio is 34.
"We consider either a rate reduction as low as 2.5 percent," he said, "or a principal reduction that would help somebody achieve that 34 percent ratio."
Notices go out in December to Countrywide mortgage holders who have had a change in income, have fallen behind in their payments, or now owe more money on the mortgage than the home's present value.
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