This is a quick view of the lenders who are participating in principal reductions on mortgages. Pay attention to the information that is given about some of these lenders.
Banks Participating in Principal Reductions:
1. BOFA
2. CHASE
3. WELLS FARGO
4. GMAC
5. ALLY BANK
6. CITI MORTGAGE
The lenders above have certain criteria that is important when processing these principal reductions:
1. Must be 60 days late
2. CANNOT be a Fannie Mae, Freddie Mac, HUD, VA, GSE Loan. These are government loans/investors that will NOT participate in the principal reduction program.
Requirements for Wells Fargo, Citi Mortgage, GMAC:
These lenders can do the principal reduction if they own the loan. This means the loan is with these lenders and it hasn't been sold, transferred, or serviced with another bank.
Example: If your mortgage has been Wells Fargo from the day you started paying the mortgage to this present day then the principal reduction can be done. However same example but you recently received a letter in the mail that the mortgage is being transferred to "ABC Bank" and that's whom you will have to pay from now on then the loan, this loan will not qualify for a principal reduction.
The 2 banks that don't need to own your loan for principal reduction are BOFA and Chase. If you had your mortgage with either of the two and have been transferred to another servicer they are able to review your file for principal reduction.
As always contact the lender and ask if the borrower qualifies. This will lead to a great relationship and possible future business.
-The Short Sale Department
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