Bank of America Helping Homeowners Avoid Foreclosure

In hopes of preventing more foreclosures from hitting the housing market, Bank of America has announced a program to reduce mortgage principle for some of their borrowers who got loans through Countrywide Financial. An article from the Los Angeles Times wrote:

Amid increasing government pressure to stem foreclosures, Bank of America Corp. said Wednesday that it would offer to erase as much as $3 billion in principal owed by thousands of severely delinquent borrowers who owe more than their homes are worth.

The bank's plan is by far the most ambitious and systematic effort by a major lender to help homeowners avoid foreclosures while continuing to make loan payments. Unlike previous initiatives, this one will be geared toward borrowers who are so far underwater that they are unlikely to be helped by a government housing relief plan.

This action by Bank of America will hopefully keep the housing market from being hit by a large amount of foreclosures. The current state of the housing market is very fragile at this point and having it face another wave of foreclosures would make the current situation much worse. If other banks and lending agencies made efforts similar to this one to help out homeowners facing forclosure, maybe we could speed up the recovery of our housing market and even our economy as a whole.