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Friday, March 09, 2012

Bank of America Reaches Deal on Housing

Bank of America will provide deeper-than-anticipated principal reductions for about 200,000 homeowners under newly-disclosed terms of last month’s foreclosure settlement with state and federal authorities.

The cuts for homeowners who owe more than their homes are worth could total more than $100,000 each under the deal with the government, according to Dan Frahm, a spokesman for Bank of America. Bank of America hopes it will be able to reduce what it owes in penalties under the settlement by up to $850 million.

The $26 billion settlement was announced last month by 49 state attorneys general, as well as officials from the Department of Housing and Urban Development, the Department of Justice and other federal agencies.

The principal reductions for the affected Bank of America customers will likely be deeper than the broader group of distressed homeowners covered by the settlement.

The details of the separate deal, which were first reported by The Wall Street Journal, are expected to be included in court documents as part of the settlement that could be filed as soon as Friday.


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