2 Big Banks Slash Principal on Thousands of Mortgages

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The New York Times reported today that Bank of America and JPMorgan Chase have started modifying tens of thousands of mortgages that have been labeled "especially risky," even if the borrowers haven't been asked.

The Times said, in some cases, banks are slashing the amount borrowers owe. In one example, a Florida woman's principal was cut in half. The Times said BOA and Chase are targeting holders of "pay option adjustable-rate mortages." Option ARM loans were seen as especially high risk in the wake of the financial crisis. The Times had not received any official comment from either bank.