""GMAC Mortgage"":http://www.gmacmortgage.com, the Pennsylvania-based home loan unit of ""Ally Bank"":http://www.ally.com, has teamed up with the ""Loan Value Group, LLC"":http://www.loanvaluegroup.com/ on a pilot program that provides financial incentives for borrowers with VA loans to remain current.
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GMAC is offering Loan Value Group's ""Responsible Homeowner (RH) Reward"":http://www.rhreward.com/ program to a group of Veterans Administration (VA) customers who are current on their mortgage payments but have seen a significant decline in the value of their homes. The program returns a portion of their lost equity in exchange for continued, timely mortgage payments.
RH Reward is designed to encourage homeowners to avoid default and possible foreclosure by offering a cash reward when specific payment milestones are met. The program creates an incentive without changing the terms of the original mortgage note, or requiring additional documentation or disclosures by the homeowner.
Participation in the program is completely voluntary and there is no cost to the homeowner.
GMAC Mortgage has offered the pilot program to more than 4,000 military borrowers and their families who
[COLUMN_BREAK]have obtained a streamlined refinance mortgage loan guaranteed through the VA. To be eligible for selection into this pilot program, the loan must be in a ""current"" loan status.
""GMAC Mortgage is committed to preserving home ownership whenever possible and has been a leader in exploring and adopting programs to assist borrowers,"" said Steve Abreu, president of GMAC Mortgage.
""We are pleased to offer this additional option for the men and woman who serve our country and who may have lost some value in their home due to the housing market disruption,"" Abreu added.
Under the RH Reward program, the homeowner with negative equity is selected by GMAC Mortgage and presented with an initial RH Reward in their designated account.
The homeowner is required to continue making their full mortgage payments on time over the life of the loan to remain qualified.
For a fixed period of time following enrollment, each month the homeowner makes their payment on time, an additional reward is credited to their RH Reward account.
Upon pay-off of the loan, if all required payment milestones have been met, the homeowner will receive a check from GMAC Mortgage for the full balance of their RH Reward account.
The RH Reward program was initially launched as a pilot across the 28 states and the District of Columbia containing cities most impacted by declining home values.
The company is evaluating expansion opportunities in other states across the country.