CHARLOTTE -- Bank of America Corp. says it can't get struggling homeowners to accept its help, according to Bloomberg.
The news agency reported this week that BofA has offered on average $150,000 in mortgage principal reduction to some borrowers as part of its recent foreclosure settlement with the U.S. government.
And you would think people would rush to accept such a huge discount. After all, it's not every day the bank offers $150,000 in discounts on loans. But instead, crickets.
When Bank of America Corp. sent letters to 60,000 struggling homeowners offering to slice an average $150,000 off their loans, the lender got an unusual response from most of them: silence.
Homeowners who fell behind on their payments began receiving the mailings in May, part of the bank's effort to meet terms of the $25 billion industry settlement over foreclosure abuses. More than half haven't responded as "borrower fatigue" causes them to tune out the offers, said Dan Frahm, a spokesman for the Charlotte, North Carolina-based bank.
The article doesn't give detailed numbers, only disclosing BofA is disappointed with the reaction so far. Some speculate the poor response is because people have already walked away from the homes. Others suggest borrowers are so upset with BofA's handling of their accounts that they don't even bother to respond or even open mail from the lender.
That's not surprising. BofA has been involved in numerous customer service gaffes in recent years as it tries to untangle the $40 billion mess it inherited from Countrywide Financial.
Bloomberg reports BofA has more than 1 million borrowers at least 60 days past due on their mortgages. The company is hopeful the response rate to principal reduction will improve as more homeowners still fighting to save their houses are contacted.
Bank of America is metro Atlanta's third largest bank with 145 branches and $19.5 billion in local deposits.
(Atlanta Business Chronicle)