WASHINGTON — Bank of America has agreed to rework the mortgages of nearly 400,000 people who took out loans with Countrywide Financial. The agreement could lead to a modification of loans in excess of $8 billion, according to a statement by the bank.
The agreement stems from a series of lawsuits alleging predatory lending brought in several states against the formerly high-flying subprime mortgage firm.
Borrowers who took out loans with Countrywide before Dec. 31 and occupy the property as their primary residence are eligible. First-year payments of principal, interest, taxes and insurance will be targeted to equal to 34% of the borrower's income. Later payments will be adjusted using increases that present minimal risk of payment shock and default, according to the bank.
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