Bank of America is sending letters to 200,000 mortgage borrowers who may be eligible for loan modifications as part of the $25 billion legal settlement between large banks, the federal government and state governments includingSouth Carolina.
The settlement announced in February was meant to resolve claims of foreclosure-related abuses against five major banks.
Bank of America said it will contact customers who may qualify over the next several months. About 5,000 already have been offered trial loan modifications.
Bank of America said the new round of loan modifications are meant for customers who owe more than their homes are worth, were at least 60 days behind on payments as of Jan. 31, and have home payments (including insurance and property taxes) that exceed 25 percent of their gross household income.
Bank of America estimated average monthly savings of 30 percent on mortgage payments of customers who qualify.
The other banks involved in the legal settlement are Wells Fargo, J.P. Morgan Chase, Citigroup and Ally Financial. Wells Fargo said it began contacting customers about settlement-related modifications in March.
Wells Fargo spokesman Josh Dunn said the San Francisco-based bank provided $4.1 billion in loan modifications before the settlement.
Federal mortgage loan relief programs, aimed at refinancing or modifying loans, were limited to those who loans owned by Fannie Mae and Freddie Mac.
