Bank of America announced on Wednesday that it would start offering debt reduction for homeowners who have an underwater mortgage. However, the offer has got a mixed reaction from industry analysts.

Bank of America has said that it would reach out to homeowners who are struggling to keep up with their mortgage payments and are likely to see a foreclosure of their property if no help is offered. The offer would be valid only when the mortgage balance exceeds the value of the property by at least 20%. The bank would choose about 45,000 homeowners to whom it would extend the offer of reducing their debt by a maximum of 30% in the next few years. [Read more…]