Posted on October 6, 2008 by Aaron Morris

Bank of America taken to Woodshed over Mortgages

Facing a lawsuit over deceptive mortgage practices, Bank of America Corp. is agreeing to pay more than $8 billion to modify hundreds of thousands of loans to keep people from losing their homes.

Charlotte, N.C.-based Bank of America said Monday it will modify troubled mortgages with up to $8.4 billion in interest rate and principal reductions for nearly 400,000 customers of Countrywide, the troubled mortgage lender it acquired last summer. The announcement arrived after the Illinois attorney general's office said Sunday that the bank was modifying loans for customers in 11 states.

Some borrowers stuck with Countrywide customers might qualify for having to pay nothing but interest for a decade. Even people who can't afford to keep their homes with such changes will be able to get help moving to a new home.

Nine other states have also joined the settlement, and other states could sign on.  In California alone, the settlement will offer $3.5 billion in relief. 

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