Bank of America settles lawsuit over bad mortgages

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PHOENIX -- Some welcome news for thousands of Arizonans struggling to keep their homes.

Bank of America said today it will modify troubled mortgages for nearly 400,000 customers of Countrywide Financial Corporation, the troubled mortgage lender it acquired last summer.

The announcement comes after the Illinois attorney general's office said yesterday that the bank was modifying loans for customers in 11 states, including Arizona.

Arizona Attorney General Terry Goddard says more than 13,000 Arizonans will qualify to have their loans modified.

Bank of America says it will launch the new mortgage aid program in December.

(Copyright 2008 by The Associated Press. All Rights Reserved.)