BofA contacts customers about reducing loan amountsMay 8, 2012 @ 7:55 am
Bank of America has mailed letters to more than 200,000 mortgage borrowers for potential principal reduction under the robo-signing settlement, Housing Wire reported.
The deal with the 49 state attorneys general and the five largest mortgage servicers was approved in March. It requires BofA to provide $11 billion in relief and fines for past foreclosure abuses and mishandled documentation.
But soon after, the bank reached a side deal to provide more principal reduction and avoid roughly $850 million in fines.
The bank actually began some principal reduction in March. It offered 5,000 trial modifications with more than $700 million in write-downs.
To be eligible, a borrower must owe more on the mortgage than the home is worth, must be at least 60 days delinquent as of January. 31. The principal, interest, property tax and insurance must total more than 25 percent of the borrower's monthly income.
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