Bank of America Corp. said on Tuesday it would expand a program designed to simplify disclosure of customers' key borrowing terms to include those affected by a U.S. government-backed mortgage modification initiative.
The bank will soon begin distributing a one-page statement to all customers who have agreed to a permanent mortgage modification under the U.S. government's Home Affordable Modification Program, or HAMP, the bank said.
Bank of America's disclosure program, dubbed the clarity commitment, was introduced in April 2009 for new mortgages, and has expanded to cover credit cards and other home loan types such as reverse mortgages.
Bank of America's change is the latest reaction by the banking sector to criticism that the industry failed to disclose adequately the risks and terms of some loans during the housing boom to borrowers.
Roughly 160,000 Bank of America customers have had mortgages modified under HAMP temporarily, and those mortgages that are permanently modified after an initial trial period will receive a notice of changes to key payment terms.
The clarity commitment program now covers 95 percent of Bank of America's home loan offerings, company spokesman Rick Simon said.
Bank of America services 14 million U.S. mortgages, and has modified 615,000 mortgages under government-backed and private programs since January 2008.
© 2022 Thomson/Reuters. All rights reserved.