Is Your Loan LIBOR Pegged? Five Alabama homeowners have filed suit against a large group of lenders, BofA, Barclays and Citibank chief among them, for allegedly rigging the LIBOR rates that their mortgage loans are pegged to. The basis for their claims is simply that, if proven, the alleged rigging of the rates on their loans cost them a great deal more money than they otherwise would have had to pay without rigged interest rates. Who's right? Were their rates rigged? Those answers will have to wait for a court trial. However, if your loan is LIBOR-based and provided by one of the named lenders, you may want to have someone such as a lawyer and/or accountant review your loan documents and then compare them to the LIBOR rates that existed at the time of your loan. For that, you may also need to enlist the help of a banker from one of the large banks NOT named in the suit. Aside from extra costs, such a rigging could conceivably contribute to a foreclosure if the increased rigged cost made it difficult or impossible for you to pay your mortgage. Hoping you aren't a victim, Good Luck in your investigation.

BofA FORGIVENESS: Bank of America, BofA, has announced that it is sending letters to 130,000 second mortgage customers across the country that it is outright forgiving their second mortgages to BofA. Saying that the recipients of these notifications, must achieve a "specific threshold" level of delinquency, without publicly defining what that level may be, the bank noted a borrower cannot volunteer for the forgiveness program. BofA determines who benefits and will receive the notices. They also note that being the lucky recipient of this notice won't also forgive a delinquency or pending foreclosure from a separate first mortgage held by BofA. A further note: if you are lucky enough to receive one of these forgiveness letters, you may still be liable for federal and/or state income taxes on the amount of the loan that is being forgiven. Check with your accountant for advice in this regard. How do you know if you're getting a notice? Wait for it to arrive, or, initiate action yourself by calling BofA and seeing if: a.) they will tell you directly before any letter is sent; and b.) if, given their willingnes to supply information, you are one of the lucky intended recipients. As always, Good Luck.