When Attorney General Lisa Madigan sued Countrywide Financial in June for engaging in deceptive mortgage lending practices, her goal was "to help homeowners now." It now appears she's done just that:
Countrywide Financial Corp., the home mortgage lender acquired by Bank of America Corp. in July, will offer interest rate and loan principal reductions plus other distressed borrower relief valued at $8.4 billion to settle consumer fraud complaints from 11 states.
The accord, which includes relocation assistance for homeowners whose homes have been or are about to be foreclosed, will affect about 400,000 customers and resolves lawsuits filed by attorneys general in Illinois, California, Connecticut and Florida and complaints from seven other states, according to attorneys general Lisa Madigan of Illinois and Edmund G. ``Jerry'' Brown of California.
While the bailout negotiations dominated the news last week, Madigan and her fellow attorneys general came to an agreement with Bank of America late last week. The deal establishes the nation's first mandatory mortgage relief program, making sure monthly payments do not exceed 32 percent of a family's household income, and should help 21,000 Illinois residents keep their homes:
"We will have the first-ever mandatory loan modification program. We're going to be using this as a model for other lenders," Madigan said. "Our goal was to keep as many people in Illinois as possible in their homes." [...]
The bulk of the settlement—$8.4 billion—represents the reduction in principal and interest payments for Countrywide customers who hold adjustable-rate and fixed-rate subprime mortgages. In addition, Countrywide expects to waive $56 million in prepayment penalties and $79 million in late fees. The firm will pay $150 million to people already forced out of their homes and another $60 million in relocation costs for people in the process of being forced from their homes.
It's no suprise that Countrywide -- by far the largest subprime lender in Illinois -- decided to settle out of court, considering that Madigan's case was reportedly air tight.
Andrew Cleaver (not verified) on Mon, 10/06/2008 - 21:09
Thank you Lisa Madigan and the Attorney General's office of Illinois.
My wife and I were unable to negociate with Countrywide Home Loans due to the lack of communication with their representatives. We called, wrote and faxed our request and financial information to renegotiate, forbearance, or restructucture our mortgage but was unable to resolve our issue with representatives of Countrywide and Genworth Financial our PMI provider. Unfortunately we were forced to file Chapter 13 Bankruptcy in September 2008 to keep our home.
We have an Intrerest Only loan and have made timely monthly until I loss my job in September 2006 due to downsizing. Prior to the job loss we paid down a portion of the principal also on a timely basis. We desire to keep our home for we put our life saving into the home which at the time was 16% of the homes value.
Can this lawsuit settlement of help my wife and I?
If so in what way.
Josh Kalven on Mon, 10/06/2008 - 22:25
Andrew,
There are two numbers you can call to figure out if the settlement terms affect you:
Madigan said howeowners who have questions about the settlement and how it may affect them can call Bank of America 1-800-669-6607 or Madigan’s Homeowners Referral Hotline at 1-866-544-7151 from 8 a.m. to 8 p.m. Monday to Friday.
Best of luck.
Gina (not verified) on Wed, 10/15/2008 - 10:14
I have read about the settlement of the lawsuit with Countrywide. How does the settlement affect people in New York State who have suffered through this. I have two loans with countrywide and when I fell behind on one of them they charged attorney fees even though I was calling daily to get a catch up figure. They stalled me for over two weeks and then forced me to pay over $3,000 of attorney fees even though I kept asking for the catch up payment.
Anonymous (not verified) on Wed, 10/15/2008 - 13:41
I also have an interest only loan at 7% with Countrywide that I got in July 2006. Will this be classified as a sub-prime loan?
thank you.
ANGEL (not verified) on Wed, 10/15/2008 - 23:27
WHEN I REFIED MY HOUSE IN 2005 IT WAS FINANCED WITH DECISION ONE THEN TO IMPAC WHICH I BELIEVE ARE BOTH COUNTRYWIDE BANKS. MY LOAN WAS A PREDATORY LOAN FIXED FOR 2 YEARS THAN ADJUSTED. BEFORE IT ADJUSTED I LOST MY JOB AND MY HUSBAND GOT TRANFERRED A COUPLE HOURS AWAY. SO I TRIED TO DO A LOAN MODIFICATION OR REFI AND THEY TOTALLY IGNORED ME. AFTER I HAD SIGNED THE PAPERS WHEN I DID MY LOAN I NOTICED THE LOAN OFICER FORGED A 401K AND SOME OTHER FINANCES "ON OUR BEHALF" WHICH I DIDN'T AGREE TO. I TRIED FOR A YEAR TO WORK SOMETHING OUT WITH GMAC WHO THE LOAN TRANSFERRED TO I SUBMITTED FINANCIAL PACKAGES AND CALLED FOR 8 MONTHS STRAIGHT TO WORK SOMETHING OUT. I GOT DISCONNECTED AFTER BEING ON HOLD 2-3 HOURS AND NEVER FOUND A LIVE PERSON. AFTER 8 MONTHS OF CALLING EVERYDAY I FINALLY GOT A HOLD OF A REAL PERSON AND TOLD ME YES THEY RECIEVED MY FINANCIAL PACKAGES BUT DIDN'T BOTHER TO LOOK AT THEM. WELL NOW THEY FORCLOSED ON MY HOUSE AND NOW ARE TRYING TO EVICT ME EVEN THOUGH I HAVE BEEN TRYING TO FIND A WAY TO SAVE MY HOME. IS THERE ANYTHING I CAN DO TO SAVE MY HOME FOR MY FAMILY? SINCE COUNTRYWIDE BANK WAS THE LOAN ORIGINATOR DO I HAVE ANY OPTIONS? THANK YOU!
Anonymous (not verified) on Wed, 10/29/2008 - 00:43
Hello,
Can anyone please let me know about any other class action lawsuits against Bank of AMERICA FOR SECOND MORTGAGES. My second mortgage is very similar to these . It is directly through Bank OfAmerica.
Thank you,
Very much for your help!
Nigel (not verified) on Thu, 10/30/2008 - 14:02
I recieved a letter from CW stating that a former employee had sold my private information, a different creditor confirmed my worst fears when asking me to confirm my address, apparently the one they had just pulled from a credit report was quite different. Does anyone know of a class action suite pertaining to this matter?
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