Bank of America's Goldilocks Scam

"The bank says we need more porridge."

After being the lead wrecking ball that nearly wiped out the housing market, Bank of America is now begrudgingly paying penance by offering principle write-downs to 200,000 drowning victims whose homes are underwater.

They aren't doing this out the goodness of their heart, that would be out of character for a banking cartel of this magnitude. After being sued by Federal and state agencies for their role in the fake document, robo-signing, home theft, forgery scandal they are being forced into a settlement which can be equated with throwing a bone to a starving dog, then calling it an act of love.

In other words they are getting away with reverse bank robbery...... again.

A select group of struggling mortgage borrowers is about to get an offer that sounds too good to be true. Executives at Bank of America say that they will begin mailing 200,000 letters offering certain customers (those who can hear dog whistles) mortgage principal reduction. So far 5000 lucky lottery winners have been selected to share in the prize- but wait  -- read the fine print before you jump for joy.

"If people get these things and toss them, they won't be eligible," says Ron Sturzenegger, the Bank of America executive charged with providing solutions to borrowers in need of mortgage assistance. eligible borrowers could get an average of $150,000 knocked off the balance of their mortgages.

Those five thousand borrowers have already received a collective $700 million in principal reduction through a pilot program for those already in a modification negotiation. The 200,000 borrowers being targeted now may have already exhausted modification options or may have yet to contact the lender.

No prize for you sucker!

Executives say borrowers receiving the letters are eligible, but they still have to prove they qualify. In order to be eligible, a borrower must be 60 days late on the mortgage payment as of Jan. 31, 2012. The borrower has to owe more on the mortgage than the home is currently worth, and the borrower's loan must either be owned by Bank of America or serviced by Bank of America for an investor who is allowing the modifications. (huh?)

In order to qualify for the modification, the borrower must answer the letter with full documentation of income, showing that under the terms of the modification they can make the monthly payment. A borrower with no income would, therefore, not qualify. A borrower's current monthly payment must be more than 25% of gross income, and the borrower must show they are unable to afford that, this could be called the Goldilocks Clause, where too much income means "no go", and too little income means "sorry chump", but just enough income is deemed.... "just right".

If the borrower qualifies, Bank of America will bring the monthly mortgage payment down to 25% of the borrower's gross income. That could mean principal forgiveness of more than $100,000, as there is no limit to the amount of the mortgage. If enough borrowers respond, it could cost Bank of America far more than it committed to in the settlement. But if the past behavior of a criminal predicts their future actions, you know Bank of America will find a way to protect their interests.

Not all of the 200,000 borrowers who receive the letters are expected to respond. Executives say there is a level of fatigue among delinquent borrowers who have already received several notices or who may have gone through a failed modification process already. Some borrowers simply don’t want to stay in their homes, while others may think the offer is a scam.



What BofA forgets to mention is that they have billions of dollars tied to those mortgages in second liens, you know those equity loans pimped by the bank where they encouraged home owners to use their homes as an ATM and finance that trip to Hawaii. So as long as some homeowners can afford to pay the first mortgage odds are they won't go belly up on the second.


There are currently 11 million under-water homes across America, some will get the same deal if their mortgage was through one of the big five criminal banks, most however will stay treading water for a very long time. But don't blame the financial wizards who sold you that inflated house, they were just keeping the American Dream alive, honest.

So be grateful for that bone, because that's all your going to get. The rest of the dogs will just have to roll over and play dead.


ickenittle