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WPEC-TV CBS12 News :: News - Palm Beach County News - 200,000 Bank of America customers in line for foreclosure relief

200,000 Bank of America customers in line for foreclosure relief

ROYAL PALM BEACH, Fla. -- If you have a mortgage through Bank of America and you're facing foreclosure, you could soon be offered a reduction in your principal balance.

Bank of America officials say they have has begun contacting some of its customers who qualify to have their home loans reduced. It's all part of a multi-state settlement over questionable foreclosure practices.

Steve Brotman: We don't know which homeowners will get the letters.

Over the last two days, foreclosure defense attorney Steve Brotman has been getting a lot of phone calls from clients who want to know if they'll be among the lucky homeowners eligible to get their home loans reduced by up to $150,000.

Brotman: They're anxious, they want to find out if they're getting the letters what it will mean.

More than 200,000 customers could be in line for a reduction in the principal balance on their mortgage. Bank of America making the announcement earlier this week.

Brotman: The basic criteria is that you are 60 days behind on the loan and your house is underwater, which means you owe more than the house is worth.

It's all part of a $25 billion settlement between several states and five major lenders who settled foreclosure abuse allegations in February. Most of the homeowners effected are in Florida and California. Bank of America is the first to announce a plan.

Brotman: BOA typically has been reluctant to offer big reductions to homeowners, so we're excited to see BOA stepping up to the plate here.

But not everyone is excited. Some homeowners who have been paying their home loans on time say those who are behind on their mortgages are being rewarded.
Brotman says many of is clients either lost their jobs or fell behind because of the housing crisis and didn't strategically default.

Brotman: They couldn't afford their payments anymore. Once that loan is accelerated the bank will no longer take payments from them anymore. If they do get back on their feet they can't resume their payments again they have to modify their loan or come to agreement with the bank.

Attorneys aren't sure exactly how many BOA customers will qualify. But they hope this program is better than others that didn't help very many people save their homes.200,000 Bank of America customers in line for foreclosure relief

Wednesday, May 9 2012, 08:07 PM EDT

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