Bank of America announces Principal Forgiveness for some Countrywide loans
Hip Hip Hooray!
Bank of America today announced its decision to agree to permit principal forgiveness for certain Countrywide loans which are severely underwater. This decision will affect some 45,000 borrowers who have “sub-prime and pay-option” loans.
This is fantastic news for those who are affected, as negative equity or being under-water, is one of the biggest reasons why some borrowers face foreclosure. Of course, the fact that some of these borrowers are voluntarily choosing foreclosure and walking away probably has something to do with BofA’s announcement today as well.
Countrywide issued a lot of sub-prime and option ARM products to consumers in California, could it be that they are acknowledging they were questionable products?
Whatever the reason, this is good news for all distressed property owners as this may be the first step and other lenders may follow Bank of America’s steps.
