BofA Wording May Cause More Foreclosures

Print this

Puget Sound Business Journal 
June 29, 2009
Grind, Kirsten

Bank of America is drawing criticism for newly added language in its short-sale contract for properties hoping to stay out of the foreclosure process. While some borrowers expect the bank to eat the loss when they sell their home for less than what is owed, the clause in question allows BofA to require the homeowner to repay the difference -- possibly leading to more foreclosures. The bank defends the policy, calling it status quo among investors and mortgage insurers; and other lenders are reported to have similar language in place. While the prevalence of such policies is unknown, the impact on homeowners nationwide could be significant even if BofA is the only bank to implement the practice, given that it is one of the biggest U.S. home lenders.

 

Abstract News © Copyright 2008 INFORMATION, INC.
Powered by Information, Inc.