My thought on this is BofA announced it will do this because of the litigation and settlement. I’m sure they figure if they state they are voluntarily doing this, they will not be mandated by the govt to do it.
It’s really hard for me to believe the banks would just take the hit (write-off) completely, and just expunge the borrower of the original obligation and lost loan value.
I would speculate they will minimally lower the principal loan amount (from original) and work some sort of deal where they get compensation on the end of the loan. Maybe making new mortgages a 40 or 50 year and the interest fixed a 6.
