April 17, 2009: 07:40 PM ET

WASHINGTON -(Dow Jones)- Bank of America (BAC) has signed an agreement to participate in the administration’s $75 billion foreclosure prevention effort, making it the seventh mortgage-servicing company to join the program, a Bank of America spokeswoman said.

Earlier this week, the Treasury announced it had signed contracts with Chase Home Finance, part of JPMorgan Chase (JPM), Wells Fargo & Co. (WFC), General Motors corp.’s (GM) GMAC Mortgage Inc., Citigroup Inc.‘s (C) CitiMortgage unit, Select Portfolio Servicing (SPS) and Saxon Mortgage Services Inc., a unit of Saxon Capital (SAXN).

Bank of America has signed the agreement with Fannie Mae (FNM), the government-controlled mortgage finance firm that is administering the effort, Jumana Bauwensthe, the bank spokeswoman said.

Under the program, the government will pay up to $75 billion in incentives to lenders and borrowers that complete loan modifications achieving certain standards. Mortgage servicers must bring borrowers’ monthly payments down to at least 38% of their income by dropping rates, stretching out loan terms or reducing principal. Lenders, if they sign onto the program, can’t cherry-pick loans; they must consider any troubled loan to see if it meets the program guidelines.

(END) Dow Jones Newswires
04-17-09 1940ET
Copyright (c) 2009 Dow Jones & Company, Inc.

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