BofA Forgiving $3B in Mortgage Debt

45K 'underwater' borrowers to be offered reduction
By Rob Quinn,  Newser Staff
Posted Mar 25, 2010 1:42 AM CDT
Updated Mar 25, 2010 6:54 AM CDT
BofA Forgiving $3B in Mortgage Debt
The largest block of affected loans are in California, a Bank of America spokesman said.   (Getty Images)

Bank of America is offering to slash mortgage-loan balances by up to 30% for thousands of delinquent borrowers who owe more than their homes are worth. The plan—part of an agreement to settle a lending-abuse suit—is one of the most ambitious moves yet to ease the foreclosure crisis, and is expected to serve as a model for other lenders, the Wall Street Journal reports.

The offer to erase principal debt will be made to some 45,000 adjustable-mortage holders nationwide. Holders of "underwater mortgages" have been highly reluctant to accept loan modifications that don't involve principal reduction, said a bank official. "The whole purpose of the program is to get more customers to return phone calls," she added.
(More Bank of America stories.)

Get the news faster.
Tap to install our app.
Install the Newser News app
in two easy steps:
1. Tap in your navigation bar.
2. Tap to Add to Home Screen.