Arguing that the failure to implement principal loan forgiveness in its loan modification programs harms struggling homeowners and investors, Massachusetts Attorney General Martha Coakley led a coalition of states in urging Fannie Mae and Freddie Mac to reverse its position. AG Coakley made her case in a letter sent to Edward J. DeMarco, Acting Director of the Federal Housing Finance Agency (FHFA). Coakley was joined by 10 other state attorneys general, including California, Delaware, Illinois, Iowa, Maryland, Minnesota, New Mexico, New York, Oregon and Vermont.Click to continue

Wells Fargo has announced that beginning Dec. 18, 2010, through June 30, 2013, at-risk Wachovia Pick-a-Payment customers may be eligible to earn principal forgiveness by making on-time mortgage payments. The company also will contribute about $24 million to eight states to enlist help in customer outreach, and to prevent or mitigate the impacts of foreclosures in these communities. The terms of this agreement have been contemplated in the company’s financial projections, and are expected to have no impact on third-quarter financial results.Click to continue

Bank of America has begun implementation of an earned principal forgiveness approach to modifying certain loans eligible for its National Homeownership Retention Program (NHRP). The plan is being offered to homeowners who owe considerably more on their loan than the current value of their home, when the loan is being considered for modification through the government’s Home Affordable Modification Program (HAMP).Click to continue

Bank of America announced that it will look first at principal forgiveness, ahead of an interest rate reduction, when modifying certain sub-prime, pay-option and prime two-year hybrid mortgages qualifying for its National Homeownership Retention Program (NHRP). Several enhancements are being made to the program, including the introduction of an earned principal forgiveness approach to modifying mortgages that are severely underwater.Click to continue