Tuesday, October 7, 2008

B of A: Homeowners Get a Break

By Chris Thompson
Tue, Oct 7, 2008 at 8:37 AM

When Bank of America gobbled up the Country Financial Corporation, it also got saddled with a bumper crop of lawsuits, in which plaintiffs alleged that Countrywide suckered them into crippling mortgages with deceptive advertising and high pressure tactics. Now, according to the San Francisco Chronicle, B of A has agreed to settle, offering to reduce both the interest rate and principal balance for 400,000 homeowners around the country, including 120,000 in California. The amount of debt written off comes to about $8.4 billion. Jerry Brown brokered the deal, but some critics suggest it's not as remarkable as it sounds. B of A may have had to reduce much of this debt anyway, to qualify for the congressional bailout and get into new federal programs that guarantee repayment in return for refinancing mortgages to 30-year fixed rate deals.

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