WASHINGTON — The Obama administration plans to announce Friday that it is revamping its foreclosure prevention plan to encourage lenders to offer principal write downs to troubled borrowers.
Until now, the Home Affordable Mortgage Program has mainly focused on lowering a borrower's payment through interest rate reductions, a tactic critics have said does not address borrowers who owe more on their mortgage than their home is worth. One lender, Bank of America Corp. [BAC], already announced this week that it would agree to write down the principal of a limited pool of troubled loans.
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