NEW YORK ( TheStreet) -- Bank of America ( BAC) was among a handful of winning bank stocks Friday after the government unveiled a plan shrink home loans of some troubled borrowers. Bank of America and other U.S. bank stocks rose after the Obama Administration announced a package of improvements to the Home Affordable Modification Program in order to help some homeowners stave off foreclosure.
The plan uses $14 billion in Troubled Asset Relief Program, or TARP, funds to aid homeowners who owe more than their home is worth. The plan also moves to prevent banks to foreclose on homeowners applying for a loan modification. News of the White House plan sent some bank stocks higher for a fifth consecutive session. Bank of America gained 2.1% to $18.12, Wells Fargo ( WFC) was up 1.7% to $31.59, Citigroup ( C) rose 1.6% to $4.34, and JPMorgan Chase ( JPM) advanced 1.6% to $45.67. Mortgage insurers were also rising on the plan. The PMI Group ( PMI) gained 8.4% to $4.52, Radian Group ( RDN) jumped 8.3% to $14.17, and MGIC Investment ( MTG) rose 7.2% to $9.56. On the other hand, bond insurer Ambac Financial ( ABK) traded lower even after the company said it has provisional agreements to settle $16.7 billion in debt. The settlement comes a day after Ambac said it may consider a negotiated restructuring of its debt through a prepackaged bankruptcy proceeding or may seek bankruptcy protection without agreement concerning a plan of reorganization with major creditor groups. The Wisconsin Office of the Commissioner of Insurance (OCI), which regulates Ambac Assurance Corp., took control of $35 billion of its main subsidiary's liabilities. Ambac Financial shares were lately down 5 cents, or 7.5%, to 61 cents. Among analyst actions, both FBR Capital Markets and JPMorgan analysts upgraded Progressive ( PGR) on signs of improvement and market share gains. JPMorgan upped the stock to neutral from underweight with a $22 stock price target, while FBR raised its rating on shares to market perform from outperform with a $23 price target. Progressive shares were lately up 3.7% to $19.27. -- Written by Robert Holmes in Boston. Follow Robert Holmes on Twitter and become a fan of TheStreet.com on Facebook.