Bank of America is one of the biggest lenders in the country, and as such also offers one of the most efficient loss mitigation plans. It is also among the first banks to support government efforts to promote loan modification and other foreclosure prevention methods. For troubled Bank of America borrowers, there are numerous ways to get back on track and avoid foreclosureâ€"it’s just a matter of choosing the best approach. This guide presents some of the most common Bank of America loss mitigation offers and what each one can do for you. Refinancing If you don’t have negative equity, consider refinancing your home before looking into other loss mitigation plans. Refinancing doesn’t reflect as badly on your credit and can present much more comfortable terms, depending on your lender’s plan. Call up your local Bank of America to learn about their refinancing offersâ€"if your mortgage is still in good standing, chances are you won’t even have to deal with the loss mitigation office. Repayment plans If you’re in too much debt and are unable to keep up with your mortgage, a repayment plan may be a viable choice. This is a type of loan modification wherein your payments are restructured, usually temporarily, so that you can afford them while managing the rest of your debt. This loss mitigation option is usually offered to homeowners who have had temporary financial difficulties, such as job loss, divorce, or medical emergencies. Loan extensions Another type of loan modification involves an extension of your mortgage terms. This means the bank spreads out your balance over a longer period, so that you pay less every month. This type of loss mitigation is usually best for people who have adjustable-rate loans that have reverted from the initial low-interest period to normal rates, and are no longer able to afford them. The loan is usually converted to a 30-year fixed-rate mortgage. Short sales Homeowners who don’t qualify for loan modification, or whose mortgage balance is worth more than the home itself, usually opt for a short sale. In a short sale, the lender agrees to let you sell the home for less than the balance you owe, and accept the proceeds as your payment. While you don’t get to keep your home, both you and the bank avoid future loss and you get to walk away without other financial obligations. Whatever you choose, the most important thing is to act fast. Remember, the foreclosure clock starts running as soon as you start falling behind. The sooner you get in touch with Bank of America’s loss mitigation department, the better your chances of saving your home.
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