For more than a year, the mortgage industry has resisted calls to reduce principal for troubled homeowners en masse. Bank of America Corp.'s agreement to do so for 45,000 borrowers shows that in certain cases, there is now little left to lose, and perhaps something to gain, from such actions.

On Wednesday the company said it would offer "conditional" principal reductions to this group of underwater borrowers, all of whom had taken out loans from Countrywide Financial Corp., which B of A acquired in 2008. B of A said it would forgive up to 30% of the principal for these people as long as they continue paying their mortgages for five years.

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