Talks between the Arizona Department of Housing and Wells Fargo (WFC: 25.77 -1.87%) to reduce the principal on more distressed mortgages are "progressing," according to a source familiar with the negotiations.
Arizona received $268 million of the more than $7.6 billion in Hardest Hit Fund dollars disbursed by the Treasury Department last summer. It will put some of this money to pay participating banks incentives for writing down the principal on these loans.
Wells began talks with the Arizona Department of Housing earlier in the year to possibly provide principal reduction assistance. Bank of America (BAC: 10.65 -1.66%) began notifying its Arizona borrowers in March of possible principal writedowns, targeting roughly 8,000 homeowners. But talks with other large institutions continue to linger.
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