B of A Reducing Loan Balances

While millions of Americans are foreclosing on their homes, Bank of America has stepped in by offering significant mortgage loan reductions—”the industry’s boldest move yet,” according to The Wall Street Journal. Struggling homeowners with subprime and other risky mortgages will be offered reductions as high as 30 percent on their loan principal. So far banks have been reluctant to reduce principal amid the financial crisis, instead offering lowered interest rates or extending the life of repayments. But these measures haven’t been enough to convince homeowners to hang on to their bum houses, which may never regain their purchase value. Bank of America’s approach reduces loan balances to the home’s current estimated value, and the bank estimates that at least 45,000 customers will qualify for the program.


Filed under The Economy

3 responses to “B of A Reducing Loan Balances

  1. David B

    I need to refinance, or something! Grrrrr. I’m okay, but I am getting squeezed.

  2. I’m glad to hear Bank of America is offering this! Does this mean some banks are lending to more than those who don’t need loans?

  3. Zippy

    David, I’d be very interested in hearing your experience with your bank, and who it is.

    For now, I’d better leave it at that.