Bank Of America’s Modification Efforts To Include Principal Reduction

stop foreclosure The nation’s largest mortgage lender, Bank of America announced this week that it would start including principal reduction for some homeowners.  Bank of America customers could receive up to a 30% reduction in their mortgage loan balances. 

Most principal reductions will be confined to Country Wide loans where the loan balance exceeds the home’s value by 120%, where the loan is 60 days or more delinquent and where the borrower can show hardship. 

This move dovetails with the changes to the HAMP program announced by the Obama administration today to include incentives for principal reductions and assistance for unemployed borrowers.  Details about the changes to HAMP can be found here.

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