The biggest mortgage lender in the country, Bank of America, is close to reaching a settlement with disgruntled investors who put money into mortgage securities that, as we all now know, turned out to be much bigger risks than BofA ever disclosed. Such big risks, in fact, that the securities turned out to be essentially worthless.

The deal is with investors who bought mortgage-backed securities, not with the homeowners who were put into mortgages they couldn't afford. For the homeowners with BofA mortgages, the news of the deal is going to be either really good or really bad.

Bank of America is going to re-examine their mortgage loans and determine which homeowners would be able to keep up the payments on a modified mortgage. If they decide the homeowner can keep up, that homeowner is likely to get a modified mortgage quickly.

If BofA decides the homeowner is unlikely to keep up payments on a modified mortgage, then that homeowner is likely to be foreclosed on in a hurry.

The idea is to put distressed homeowners into one or the other of these camps as quickly as possible, and resolve mortgage problems, for better or for worse.

Fort Lauderdale foreclosure defense lawyers are very aware that this plan could mean foreclosure for tens of thousands of customers of Bank of America, and many of those cases are going to be in Florida, which is already one of the hardest-hit areas in the country when it comes to home foreclosures.

Source: NYT Business Day "Bank's Deal Means More Will Lose Their Homes" 7/11/2011