Marc's Mortgage Matter's

Countrywide Financial has agreed to the largest program ever to modify home loans, as part of a settlement with officials in 11 states. They had been sued by the states over what they said were predatory lending practices. Countrywide's greed turned the American dream into a nightmare for thousands of borrowers who now face foreclosure. To settle the suits, Countrywide will provide $8.4 billion in direct loan relief, affecting an estimated 400,000 borrowers nationwide, while waiving certain fees and setting aside additional funds to help people in foreclosure and relocating. None of the programs Congress had proposed made it into the final $700 billion government bailout last week. Countrywide will waive late fees of $79 million and prepayment penalties of $56 million and suspend foreclosures on delinquent borrowers with the riskiest loans. A foreclosure relief fund will be created with $150 million from Countrywide to help borrowers who are four months or more behind on their payments or whose homes have already been foreclosed on. The company will also provide $70 million to help borrowers relocate to rental housing. Borrowers that got any of the riskiest loans like the low adjustables with interest only to the notorious pay option aka option arm loans would fall into this program. Bank of America was aware of and anticipated this during its acquisition of Countrywide.