The Department of Housing and Urban Development (HUD) has reached a settlement with Bank of America, which releases the company from liability for failing to provide alternatives to foreclosure on 57,000 delinquent government-insured mortgages.The agreement, a draft of which was obtained by American Banker, was previously undisclosed. It has been forged on a separate but parallel track from ongoing settlement talks between BofA, state attorneys general and other regulators over alleged mortgage origination and servicing failures.

BofA's pact with HUD requires it to waive a minimum of $10 million in unpaid mortgage payments and vet each of the 57,000 delinquent borrowers for a possible loan modification, short sale or other foreclosure alternative.

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