Some BoA borrowers may get mortgage principal reduction

If you have a payment option ARM, or possibly some other types of ARMs, that are underwater, you may get a letter from Bank of America starting in May to alert you about a new mortgage modification program that will include a reduction in principal. The program will only focus on a certain class of ARMs for homeowners who owe more than 120% of their home's value or in a home where their value is still dropping.

Jumana Bauwens, a spokeswoman for Bank of America, confirmed the story that was first broke by Reuters, but cautioned that the program is not as broad as that story indicated. Bauwens said, "the principal reduction will not be available to all 14 million loans" in Bank of America's system.