Bank of America's own bail-out plan for Countrywide customers in risky loans. 

Bank of America announced the creation of a proactive home retention program that will systematically modify troubled mortgages with up to $8.4 billion in interest rate and principal reductions for almost 400,000 Countrywide customers nationwide (125,000 of them in California).

With this plan, Bank of America is trying to create goodwill and also further distance itself from the lending practices that went on at Countrywide for the last few years.  After initial promises of keeping Countrywide's management in place and letting them run the mortgage division of the company, BofA has made it increasingly clear that it wants nothing to do with the lending practices that took down the mortgage giant.  Dave Sambol was shown the door after just two months, very recently Drew Gissinger and Brain Hale followed. 

By working together with state Attorneys General (the Attorneys General of CA, IL and FL assisted in the design of the program. IA, OH, TX, AZ, WA, CT, NC and MI have confirmed their participation), Bank of America sends a clear message that it is "doing the right thing".  It could also be that they are trying to prevent major lawsuits down the line.  Good business is looking ahead.

The centerpiece of the program is a proactive loan modification process to provide relief to eligible borrowers who are seriously delinquent or are likely to become seriously delinquent as a result of loan features, such as rate resets or payment recasts.  

Modification options include, among others:

• FHA refinancing under the HOPE for Homeowners Program;
• Interest rate reductions, which may be granted automatically through streamlined processing; and
• Principal reductions on Pay Option adjustable rate mortgages that restore lost equity for certain borrowers.  

The program applies to eligible mortgage loan customers serviced by Countrywide and who occupy the home as their primary residence.  

Source: Bank of America pressroom - For more details on the plan, check: http://newsroom.bankofamerica.com/index.php?s=press_releases&item=8272

For other foreclosure prevention and home retention programs, check: http://allbankownedproperties.googlepages.com/foreclosure-prevention