To encourage homeowners to participate in it's modification programs, Bank of America has announced that they will put into effect a mortgage principal reduction program to assist customers. By reducing the mortgage principals, the company will be providing a valuable opportunity for customers with negative amortization loans or those who owe more than 120 percent of their home's value. Hopefully, other lenders will follow their lead.

This program will allow a homeowner to reduce the balance of their mortgage down to 100% of the value. The company will first put aside part of the mortgage principal balance as an interest-free principal forbearance. They will then allow the balance to be the forgiven principal after five years. The customer cannot default on any payments and this allows up to 30% in mortgage principal forgiveness. There are plans to begin the programs this coming May.

President of the Bank of America Home arrowhead advance tribal home loans, Barbara Desoer said that in terms of the Program modifications, they have come to realize that most customers are unwilling to settle for a solution that only settles the payment amount without additionally reducing the balance due on the arrowhead advance no credit check loans direct lender. The reason being that the amount they owe on their mortgages is more than what their homes are worth.

This program was first developed and used in 2008 with the cooperation of state attorneys general to help customers of Countrywide Bank, who financed their home with adjustable rate mortgages. Since Bank of America bought Countrywide in July 2008, these have been removed from the Countrywide product line. Now the program is being used nationwide to help homeowners in default.

Forty-four states and the District of Columbia are now taking part in the program. The most recent state to join the mortgage principal reduction program is the Commonwealth of Massachusetts. This state has worked together with the Bank of America to help put together these methods that are being used in the program to retain homeowners and provide reliable solutions.

Customers who want to participate in the program must also qualify for President Obama's mortgage arrowhead advance installment loans from tribal lenders modification program. However, Bank of America estimates that about 45,000 customers will qualify. They will be sending notifications to those who meet the preliminary qualification guidelines.