Bank of America announced that it will trim up to $100,000 off the mortgage principal of about 200,000 home owners. The bank’s principal reductions are part of the $26 billion foreclosure settlement between five major banks and state and federal officials.
Borrowers who are eligible must be 60 days or more overdue on their mortgage as well as underwater — owe more on their home than it’s currently worth. Mortgages also must be owned by Bank of America or serviced by the bank’s private investors; mortgages owned by Fannie Mannie, Freddie Mac, the Federal Housing Administration and the Veterans' Administration will not be eligible for the principal reductions.
Bank of America last week also announced a temporary moratorium on foreclosure sales of homes that are covered under the settlement.
Bank of America is the second largest mortgage service carrier, behind Wells Fargo.
Source: “Bank of America Reaches Deal on Housing,” The New York Times (March 8, 2012)
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