Bank of America to provide $71 million of mortgage relief

A national financial institution signed an agreement last week to help N.C. homeowners who are struggling to make their mortgage payments.

However, North Carolina isn’t suffering as much as some other states, those involved with the state’s housing market said.

Bank of America — the nation’s leading mortgage lender since acquiring Countrywide Financial Corporation in January — is working with 11 states, including North Carolina, to help homeowners pay their mortgages.

According to a press release from N.C. Attorney General Roy Cooper, Bank of America will provide $71 million in reduced mortgage payments to more than 5,000 state homeowners.

Dr. David Hartzell, Bell/Wood professor of real estate and finance at the Kenan-Flagler Business school, said he was unsure of why North Carolina was chosen, especially because foreclosures have not been a significant challenge for the state.

“I don’t know why it would be chosen unless it has a predominance to other states,” he said. “Maybe Bank of America just wanted to do some good in its own backyard.”

He said he did not think that foreclosures were a serious problem in the Triangle area but that in expanding areas such as southeastern Raleigh, foreclosures are probably becoming more prevalent.

Julie Woodson, director of public affairs for the N.C. Association of Realtors said the state is in a better situation than many other states.

“Through the economic downturn, all markets are lower than they have been in previous years, but N.C. is better than other states in other parts of the nation,” she said.

According to the attorney general’s press release, mortgage lenders have recently been accused of persuading borrowers to sign unaffordable loans.

But Chris Kukla, senior counsel for government affairs at the Center for Responsible Lending said the mortgage problems cannot be blamed on the lenders alone.

“You can’t have a crisis of this magnitude without a couple of players involved. Lenders and homeowners should both do more to avoid foreclosures,” he said.

Homeowners should sign for practical loans and lenders should encourage homeowners to do so, he said.

He also said foreclosures should be seen as a community issue because they affect even those who do pay their mortgages on time.

“Our estimates are that in North Carolina, for every house that goes in foreclosure within a quarter mile of your house, your house will lose two to four thousand dollars in value,” he said.

The most important factor to help avoid future problems is for the homeowners and the lenders to work together, Woodson said.

“Its important to be truthful and honest throughout the process so people agree to pay what they can afford,” she said.

“Realtors want to make sure people can achieve and maintain the American dream of homeownership. That’s what its all about.”



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