Bank of America To Forgive Some Mortgage Debt

The NY Times is reporting that BOA will be forgiving some mortgage debt by invitation only. You can expect that this will not be out of any sense of altruism or generosity. They will assess the markets and determine which properties they absolutely do not want to take back into inventory after a foreclosure sale where no one shows up to bid. In my view, this will be a very limited program for the most marginal neighborhoods or for subprime loans where the lender has the highest risk of loss or predatory lending claims. I view it as something that is really for the bank’s benefit and will only create false hopes for most homeowners who will not get a principal reduction. Here is the story.