Arizona, Nevada, and California are among the states that have proposed using federal aid money to have Bank of America lower the amount struggling borrowers owe on their mortgages.
Bank of America Corp. will begin the mortgage principal reduction program for customers in Arizona, as part of a pilot program in using the federal aid dollars from the Hardest Hit Fund. The Hardest Hit Fund is an Obama administration program designed to provide extra aid to states that face high unemployment and sour real estate markets. Individual states can determine how to use the federal money. Arizona received $125.1 million in aid.
Bank of America customers in Arizona who are struggling to make their mortgage may be eligible to have the amount owed on their mortgage reduced via matching contributions from the state and from participating mortgage investors.
The bank sent letters to home owners in Arizona who may qualify.
Source: “Bank of America Begins Mortgage Principal Reduction Program in Arizona,” Dow Jones Business News (March 2, 2011)