Bank of America Foreclosure Fraud Settlement

Bank of America was one of the five loan servicers of mortgages to reach a settlement agreement with 49 state attorney generals, including the attorney general of California, and the federal government.  The agreement was to provide $25 billion in relief to distressed borrowers and this week Bank of America has begun contacting customers who may qualify for the relief. This lawsuit came about when it was discovered that many loan servicers had routinely engaged in foreclosure fraud.

The settlement relief that was reached will be in the form of loan modifications for eligible underwater mortgages by reducing the principal balance, providing a lower interest rate, or moving some of the loan balance to be paid only at the end of the loan.  In order to be eligible the homeowner must owe more on the mortgage than the value of the home, be at least 60 days behind on payments as of Jan. 31, and have a loan that is owned by Bank of America.  Homeowners will be notified within the next three years if they are eligible for the loan modifications.

What do you think?  Will this settlement help to solve the housing crisis we are currently facing?  Will the settlement help homeowners stay in and keep their homes in the economy?