Bank of America will look initially at principal forgiveness — ahead of an interest rate reduction — when modifying certain subprime, pay-option and prime two-year hybrid mortgages qualifying for its National Homeownership Retention Program (NHRP).

Additionally, BofA announced that several enhancements are being made to the program, such as  the introduction of an earned principal forgiveness approach to modifying mortgages that are severely underwater.

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