“If people get these things and toss them, they won’t be eligible,” says Ron Sturzenegger, the Bank of America executive charged with providing solutions to borrowers in need of mortgage assistance.

But the offer is real, and eligible borrowers could get as much as $150,000 knocked off the balance of their mortgages. It is all part of the $25 billion settlement reached this year between federal and state agencies and the nation’s five largest mortgage servicers over fraudulent foreclosure document processing (so-called “robo-signing”).

Bank of America (BAC), in a deal with state attorneys general and the U.S. Department of Justice, committed $11 billion to mortgage principal reduction, but executives say they will go beyond that if enough borrowers respond to their offer. Five thousand borrowers have already received a collective $700 million in principal reduction through a pilot program for those already in a modification negotiation. The 200,000 borrowers being targeted now may have already exhausted modification options or may have yet to contact the lender.

Coming so soon after the real estate collapse, a new home mortgage with low rates, small down payment, and easy terms may sound either too good to be true, or a little too much like the reckless lending that contributed to the mess.

Revenge can be sweet. It can be even sweeter when you use your enemy’s own weapons to extract vengeance.

Six years into the worst wave of foreclosures since the Great Depression, shoddy underwriting and legal shortcuts are coming back to haunt mortgage lenders. Homeowners, sick of being pushed around by the banks, are fighting back, sometimes with David and Goliath results.

In 2008, Jewel Miser and her husband Jack began trying to get Bank of America to modify their mortgage when Jack lost his job after a local auto parts factory closed.

“We were just a month behind then,” said Jewel. “But I tried every way in the world. And they just put me off and gave me excuses.”

March Buying Advice: Pending sales are up, and experts say the economy is stronger. With mortgage rates still pretty attractive, it might be time for some fence-sitters to become homebuyers.

Just as the spring selling season is nearing, there are some encouraging signs that it might be time for buyers to dip their toes in the housing pool again.

Pending sales are up, inventory is down and some economists are predicting an end to the housing crash this year. What does this mean for home shoppers? How should it shape their strategy? We’ll ask the experts to weigh in.

In this installment of Buying Advice, we’ll also look at how best to navigate the purchase of a short sale. We asked our readers who have bid on these properties to share their experiences and advice, and we consulted a short-sale negotiator for her tips on landing one of these distressed bargains.

Robinson moved into the home in June after doing some research and determining that it was abandoned. Some call him a squatter, but he says a law called adverse possession makes him the owner.

In this installment of “Real Estate on the Cheap,” we’ll look at what appears to be the biggest real-estate bargain possible: a free house. What is adverse possession and can this tactic really score someone a house?

Understanding how banks negotiate foreclosure deals is a must if you want to buy low in today’s market.

Here are five secrets every homebuyer must know when shopping for a foreclosed home.

The moment arrives. After trying to sell your home for a year — through months of inaction, occasional nibbles, and a couple of unappealing offers — you finally get a good one. You accept. The contract comes in, contingent on a home inspection. You think about your aging air-conditioner, the balky dishwasher, the pool pump that sounds labored.

You worry.

Home inspections: Buyers demand them, sellers dread them. Almost every real estate transaction includes one. And home inspections matter. Based on the results, a buyer may require that a condition be remedied before proceeding to the closing table, or even refuse to go forward with the deal altogether.

“Aside from financing issues, failed home inspections are the single-most cause for deals to fall apart,” said Michael Saunders & Co. Realtor Pam Charron. “Buyers are expecting a home that is free of major issues. If that’s not the case, some will walk away.”

Pauline Bennett, branch manager of the downtown Sarasota Coldwell Banker office, agrees. “Home inspections are a hugely important part of the process,” Bennett said. She’s seen several transactions derailed because of inspections gone awry

The average rate for 30-year mortgages, which hit record lows in February, briefly rose above 4 percent last month for the first time since October, and many economists predict rates will continue to rise gradually as the economy and housing market recover. Freddie Mac, the government-backed mortgage company, forecasts 30-year rates will hit 4.5 percent by the end of 2012 and 5 percent by late next year, up from an average of just under 4 percent last week.

The higher rates will mean higher monthly payments for both homeowners who refinance their existing mortgages and home buyers taking out new ones.

In theory, rising mortgage rates could dampen demand for homes and slow the recovery of the long-suffering housing market. Higher rates also reduce the amount of cash homeowners have to spend on clothes, restaurants, and other expenses.

The step is the latest in a series by the Obama administration to aid struggling homeowners. It would reduce fees on mortgages the Federal Housing Administration insures so as to enable borrowers with higher-cost FHA loans to refinance.

Bank of America has agreed to reduce the loan balances of underwater homeowners more aggressively than other banks, saying that by next month it will start contacting 200,000 borrowers who may qualify.

The pledge is part of a side deal that BofA signed when it and other large providers of mortgage customer service reached a recent $25-billion foreclosure-abuse settlement with state and federal government agencies.