SEATTLE -- Relief is on the way for thousands of homeowners in Washington state.

Bank of America settled a record $8 billion lawsuit, promising to help homeowners with subprime mortgages they got from Countrywide Finance. The settlement will mean extra money to help homeowners on the verge of foreclosure.

Tammy Simmerman now knows she took on more than she could handle. Her $192,000 mortgage, with no down payment, was split into two loans.

"We were really hearing 'You could do this. You're approved and you could do this,'" she said. "We thought, 'OK, how can we make this work in our budget?'"

It turns out they couldn't make it work.

Two years into her mortgage, Simmerman had medical problems, stopped working and fell behind. When she defaulted, Countrywide Mortgage put her on a repayment plan that added $800 to her monthly payment.

"The representative's advice was to walk away from the house, rent out a bedroom in the house, take out a second job," said Simmerman. "I said 'I'm already taking a second job.'"

Simmerman's story and thousands like it prompted Countrywide's new owner, Bank of America, to cut a settlement with 11 states.

Locally that means $200 million in relief to 10,000 local homeowners on the verge of foreclosure.

"With these loan modifications, the focus is on keeping people in their homes by making mortgages affordable," said Attorney General Rob McKenna.

The new program applies to borrowers who have subprime or pay-option, adjustable-rate mortgages. But only homeowners who took out loans before the end of last year are eligible.

That adds up to $20,000 per homeowners, $2,000 for those who have already foreclosed.

"Not everybody who has one of these loans is going to be saved, unfortunately," said McKenna.

Simmerman calls this her saving grace. Extra help means extra time- to come up with the money she needs. Walking away from her home, she says, is not an option.

McKenna says more than 40 percent of Countrywide's subprime loans are delinquent in the state. To find out whether you're eligible for help, call 800-669-6607.