BofA settles to reduce qualified loans

Bank of America has alerted 5,000 homeowners that they may qualify for reduced loans as a part of a settlement of foreclosure abuses, according to the New York Daily News. The reduction could apply to as many as 200,000 customers by the bank’s estimation. To qualify, borrowers must owe more than their property’s value and be a minimum of 60 days behind on their payments as of Jan. 1, 2012. Government-backed lenders like Freddie Mac and Fannie Mae are exempt from the settlement leaving only BofA borrowers eligible for the reduction. Still around 11 million American households remain underwater. [NYDN]