(Bloomberg News) Bank of America modified more than 64,000 home loans for borrowers between December and March after settling charges over predatory lending in an agreement with 42 states.
The modifications will save borrowers $823.5 million in principal and interest, according to a summary report provided to Bloomberg News on Sunday by bank spokesman Dan Frahm. The lender has offered to modify loans with lower interest rates for 100,300 borrowers, the report said. Bank of America in July acquired Countrywide Financial Corp., formerly the largest U.S. home lender, for $2.5 billion to complement its leading positions in bank deposits and credit card lending. Countrywide’s lending practices prompted investigations by attorneys general in California, Florida and other states, leading to an October settlement in which Bank of America agreed to modifications that could save 390,000 borrowers as much as $8.4 billion. Bank of America cited surging demand for mortgage loan refinancings for helping offset higher credit costs during the first quarter, when the bank reported a $4.25 billion profit. The modification program targets subprime loans typically made to customers with the weakest credit histories and adjustable-rate mortgages that enable borrowers to defer principal payments, typically called “pay-option ARMs.”Leave a Comment
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