Bank's Loan Modification Reduces Principal Bank of America is announcing a loan modification program to help military service members who are behind on their mortgages. What's unique about the program is that the bank is offering to reduce the principal owed on the loans instead of just adjusting the interest rate.
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Bank's Home Loan Modification Reduces Principal

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Bank's Home Loan Modification Reduces Principal

Bank's Home Loan Modification Reduces Principal

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ARI SHAPIRO, Host:

NPR's Tamara Keith reports.

TAMARA KEITH: Dan Frahm is a spokesman for Bank of America home loans.

DAN FRAHM: Without principal reduction, they may not be able to recover from that situation, and foreclosure would be their only option. So in this case, we think principal reduction applied here puts us down a path to help them keep their home.

KEITH: John Taylor, president of the National Community Reinvestment Coalition, says the bank has the right idea, but he'd like to see a whole lot more of it.

JOHN TAYLOR: It's a good thing for some of the military people who qualify, but there are a lot more others who would benefit from a principal write down. So hopefully, this is the beginning of moving in that direction.

KEITH: Tamara Keith, NPR News, Washington.

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