CALABASAS, Calif. (Bank of America) – Bank of America Corp. announced a $3 billion plan Wednesday that will forgive up to 30 percent of an estimated 45,000 troubled borrowers’ mortgage balances.
The plan is incorporated into the lender’s National Homeownership Retention Program (NHRP).
The new components of the agreement apply to certain NHRP-eligible loans that also meet the basic qualifications for the government’s Home Affordable Modification Program. They include:
• A first look at principal reductions in calculating an affordable payment through an earned principal forgiveness approach to severely underwater loans.
• Principal forgiveness through a reduction of negative-amortization on certain pay-option ARMs.
• Conversion of certain pay-option ARMs to fully amortizing loans prior to a recast.
• Addition of certain prime two-year hybrid ARMs as eligible for the NHRP mortgage modification programs.
• Inclusion of Countrywide mortgages originated on or before Jan. 1, 2009, as eligible for modifications under the terms of the NHRP.
• A six-month extension of the term of the NHRP program to Dec. 31, 2012.
Bank of America developed and launched the NHRP in 2008 to provide assistance to Countrywide borrowers who financed their home with certain subprime and pay-option adjustable rate mortgages.