BofA Mailing Principal Reduction Offers to 200,000 Borrowers

bank of america; principal reduction
bank of america; principal reduction

LOS ANGELES -- Homeowners with a Bank of America mortgage have good reason to check their mailbox.

The lender said Tuesday that it has begun mailing out letters to customers who may qualify to have their home loans reduced as part of a multistate settlement over alleged foreclosure abuses.

The Charlotte, N.C.,-based company estimates that more than 200,000 of its customers could potentially be in line for a reduction in the principal balance on their mortgage.

Some customers could receive letters from the bank as early as this week that invite them to provide financial information as part of a review process for the program. The bank plans to have mailed out most of the letters by the end of the third quarter.

Bank of America estimates that customers who end up receiving the loan modifications will save, on average, 30 percent a month on their mortgage payments.