Bank of America to extinguish 150,000 second mortgages

Borrowers with second liens owned and serviced by Bank of America may qualify to get their subordinate debt extinguished entirely, Housing Wire reported.

The bank mailed 150,000 letters to pre-qualified homeowners who are eligible to have their Bank of America second-lien mortgages eliminated.

The program was designed to ease the pains of struggling borrowers who are also dealing with issues on first mortgages and to help more individuals create equity in their properties.

Second mortgages associated with a severely delinquent first mortgage also qualify as long as the second-lien is serviced or fully owned by BofA. Ownership of the first lien mortgage does not matter as long as BofA has control of the subordinate lien.

Mailings to eligible customers began in July. Only customers who receive pre-qualified letters will be able to use the program, Housing Wire reported.

“The elimination of the second lien mortgage is completely separate from any actions being taken regarding the first mortgage,” BofA said in a statement. “If the first mortgage is in foreclosure, those foreclosure activities may continue.”