Categorized | Finance and Mortgage

Bank of America Announces Reductions to Homeowner Loans

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Homeowners faced underwater mortgages are finally set to receive some much-needed relief. Bank of America has announced that they will be providing relief to those whose home values are worth less than the amount due on their mortgage loan.

 

In some circumstances, some homeowners will see their amount owed drop by more than one hundred thousand dollars. As of right now, the only loans that qualify for the loan reduction are those mortgages owned by Bank of America.

 

The reductions come as part of an agreement that will help reduce the amount that the lender owes to the Housing and Urban Development agency. Bank of America recently reached a settlement with the United States government of which requires them to pay nearly twelve billion dollars in penalties due to fraudulent foreclosure practices.

 

This recent action taken by Bank of America to reduce the amount owed on underwater mortgages will cut their penalties by roughly eight hundred and fifty million dollars.

 

While it has yet to be seen as to what the other lenders involved in the settlement will do, most expect them to follow suit, and reduce the amount owed for their own customers with underwater mortgages.

 

The settlement that led to these reductions came about after lenders were accused of processing foreclosures without verifying the appropriate documents. In some cases, fake signatures were used to speed up the foreclosure process. As a result, foreclosures were halted, and the banks were subjected to an investigation pertaining to their fraudulent actions.

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About Drew Wilson

Drew focuses on the Commercial and Mortgage/Finance categories.

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