Banks Launch Programs to Aid Military Families
Daily Real Estate News | March 14, 2011 | 
Share Banks Launch Programs to Aid Military Families
In following a recent move by J.P. Morgan Chase, Bank of America Corp. announced it would launch a new program geared to reducing loan balances for military borrowers who are struggling to pay their mortgages as they leave active duty.
Many of the banks' measures go beyond protections already provided to military borrowers in the Servicemembers Civil Relief Act. The SCRA forbids foreclosures on active-duty military and caps interest rates at 6 percent.
Bank of America’s aid program for military borrowers will help members departing active duty and who will no longer be covered by the SCRA. It will reduce the balance on home loans to “as low as 100 percent of the current market value” and offer reduced interest rates and extended terms to repay the loan. For active-duty military, interest rates will be cut to 4 percent.
Last month, J.P Morgan Chase also announced it would cut interest rates for active-duty military members to 4 percent and it would not foreclose on any active-duty military, even those who are not protected by SCRA. It also promised more loan modifications would be available to military borrowers who are struggling to make payments.
Both bank programs begin April 1.
The programs come on the heels of investigations from the Justice Department into lending abuses affecting military families. J.P. Morgan in recent weeks had admitted it overcharged 4,500 military families on loans and wrongly foreclosed on at least 18 active-duty military families.
Source: “BofA to Reduce Principal for Some Struggling Military Borrowers,” Dow Jones Business News (March 10, 2011)
ShareIn following a recent move by J.P. Morgan Chase, Bank of America Corp. announced it would launch a new program geared to reducing loan balances for military borrowers who are struggling to pay their mortgages as they leave active duty.
Many of the banks' measures go beyond protections already provided to military borrowers in the Servicemembers Civil Relief Act. The SCRA forbids foreclosures on active-duty military and caps interest rates at 6 percent.
Bank of America’s aid program for military borrowers will help members departing active duty and who will no longer be covered by the SCRA. It will reduce the balance on home loans to “as low as 100 percent of the current market value” and offer reduced interest rates and extended terms to repay the loan. For active-duty military, interest rates will be cut to 4 percent.
Last month, J.P Morgan Chase also announced it would cut interest rates for active-duty military members to 4 percent and it would not foreclose on any active-duty military, even those who are not protected by SCRA. It also promised more loan modifications would be available to military borrowers who are struggling to make payments.
Both bank programs begin April 1.
The programs come on the heels of investigations from the Justice Department into lending abuses affecting military families. J.P. Morgan in recent weeks had admitted it overcharged 4,500 military families on loans and wrongly foreclosed on at least 18 active-duty military families.
Source: “BofA to Reduce Principal for Some Struggling Military Borrowers,” Dow Jones Business News (March 10, 2011)
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