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Bank Of America Settles Suit Over Bad Mortgages

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Bank Of America Settles Suit Over Bad Mortgages

Business

Bank Of America Settles Suit Over Bad Mortgages

Bank Of America Settles Suit Over Bad Mortgages

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  • <iframe src="https://www.npr.org/player/embed/95420474/95420448" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
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Facing a lawsuit over deceptive mortgage practices, a Bank of America subsidiary will modify tens of thousands of loans to help keep people in 11 states from losing their homes. Borrowers stuck with Countrywide Financial mortgages that they can't afford could see their interest rates reduced or have the loan principal cut. Bank of America purchased Countrywide in June, at the same time Illinois and California sued Countrywide.

ARI SHAPIRO, host:

NPR business news starts with new hope for struggling homeowners.

(Soundbite of music)

SHAPIRO: One of the country's biggest banks is launching a major program to help troubled mortgage holders. Today, Bank of America announced an $8 billion home retention program. It's part of a legal settlement with various states. And it's aimed at up to 400,000 customers of Countrywide Financial. Bank of America bought Countrywide in July after the giant mortgage lender imploded. The plan involves reducing interest rates and principal in order to make sure home payments are not more than 34 percent of a borrower's income. California Attorney General Jerry Brown says this could become the largest predatory lending settlement in history.

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