Bank of America Corp. today announced a mortgage modification program for military customers, including principal forgiveness for some struggling borrowers.
The Charlotte bank said the program assists military members who are leaving active duty and having trouble making their mortgage payments.
The announcement comes as big banks are in settlement discussions with banking regulators and state attorneys general over their handling of foreclosures and modifications. The banks may face a requirement that they reduce principal for borrowers, a measure they're resisting.
At an investor conference this week, Terry Laughlin, the Bank of America executive in charge of distressed loans, said principal reduction was no "panacea" because borrowers without sufficient income still can't make payments. Chief executive Brian Moynihan also painted it as a fairness issue, saying "when you start helping certain people and don't help other people, it's going to be very hard to explain the difference."
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