Bank of America is providing mortgage relief to about 200,000 U.S. homeowners whose home values have fallen below what they owe on their mortgages.

Bank of America will reduce the amount owed by the homeowners by as much as $100,000 US in some cases. Only mortgages that are currently owned by Bank of America will qualify. Those that are owned by government entities Fannie Mae and Freddie Mac, or backed by the Federal Housing Administration will not be eligible.

The move will help the bank reduce the amount of penalties it owes to the government's Housing & Urban Development Agency by $850 million.

The penalties were part of a broader $25 billion settlement announced Feb. 9 by federal and state attorneys general and the largest mortgage lenders in the country to resolve investigations into abusive home lending and fraudulent foreclosure practices.

About 11 million American households are "underwater" on their mortgages, meaning they owe more than their homes are worth. The broader settlement with five mortgage lenders is expected reduce loans for only about 1 million of those Americans and send checks to others who were improperly foreclosed upon.

Of the five major lenders, Bank of America's penalties were the highest: $11.8 billion.

The settlement ended a painful chapter of the financial crisis, when home values sank and millions edged toward foreclosure. Lender abuses exacerbated the crisis. Many companies processed foreclosures without verifying documents. Some employees signed papers they hadn't read or used fake signatures to speed foreclosures, a practice known as robo-signing.

In the fall of 2010, Bank of America along with other large lenders temporarily halted foreclosures after a furor over robo-signed documents.

Details of Bank of America's and other mortgage lenders' plans to help homeowners as part of the settlement will be contained in court documents that are expected to be filed Friday.