Starting in December, the Bank of America is going full force to try and combat foreclosures. Their new program will be for all distressed borrowers who signed up with Countrywide Financial (now a part of Bank of America) from January 1, 2004 to December 31, 2007. Part of this procedure is due to a settlement arranged with attorney general offices of 11 states which has sued Countrywide over harmful lending practices. Mark Pearce, Deputy Commissioner of Banks in North Carolina and a member of the State Foreclosure Prevention Working Group, said that "The Countrywide settlement is a watershed moment for loan modification programs,...This is, by far, the best [program ever], even better than the FDIC program with IndyMac Bank."

The program is aimed at borrowers of subprime adjustable/fixed rate mortgages (ARMs) and option ARMs. Those with prime and Alt-A mortgages without documented income, will also be eligible. The Bank of America will also cut monthly housing payments, as well as insurance, mortgage, and property taxes, to under 34% of the borrower´s gross income. By doing this, it is estimated that at least 400,000 troubled borrowers will be able to retain their homes. Also, depending on the circumstances of the borrower, they may lower or freeze the loan interest rate, as well as cut the principal loan balance.

All who apply will be screened for eligibility and then put in contact with officials to create loan workouts. There will be no prepayment penalties or modification fees. However, it will not be a solution for everyone, as there are still those who will be unable to make any sort of reasonable payment due to divorce, job loss, illness, too many pending debts, etc.

Many have commented that no other foreclosure prevention measure has included such low house payments, Rick Simon a spokesman for the Bank of America said that, "[The program's] affordability is far better than any other program out there,". A previous program to be started by the FDIC for IndyMac customers, will keep their payments at 38% of the gross income.

The estimated cost of the program is $8.4 billion, but in the end this would be cheaper then going through a bunch of foreclosures, and saving themselves from the repossession and resell process, only made more difficult by the state of the market. It is hoped that other lenders/servicers will soon follow in the footsteps of Countrywide, but as of yet, little to no headway has been made in convincing them to do so. Pearce reported that, "So far, they have failed to show the leadership required to get it done,...I hope, having the market leader do this will spur the other servicers to greater action."