Bank of America announced it will forgive roughly 150,000 second mortgages for those borrowers that are facing financial difficulty and unable to continue paying on the second mortgage.
Qualifying homeowners are being notified by mail and have been since July.
Erasing the 2nd mortgages stems from requirements outlined in the $25 billion settlement between Bank of America, along with four more major lending institutions, and the federal authorities and state attorneys general.
The forgiven debt will not affect the borrower’s credit as it will be recorded as “paid in full”.
Qualifying borrowers have the option to accept the eradication of their loan based on possible tax implications.