11 States and $8 Billion Settlement; Countrywide Foreclosures Suspended, Mortgages to be Modified

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Facing a lawsuit over deceptive mortgage practices, a Bank of America subsidiary has agreed to modify tens of thousands of loans to keep people in 11 states from losing their homes.

Some borrowers might qualify for lower interest rates or having to pay nothing but interest for a decade. Even people who can't afford to keep their homes with such changes will be able to get help moving to a new home.

The following is a detailed news release from Attorney General Bill McCollum released on October 6 in regard to the settlement and what it means for Floridians:

Attorney General Bill McCollum today announced that Florida and several other states have reached a multimillion dollar agreement in principle with Countrywide, a newly-acquired subsidiary of Bank of America.

The agreement includes a $150 million foreclosure relief payment program and loan modifications for thousands of homeowners, including more than 57,000 Florida homeowners with qualifying Countrywide mortgages.

"This agreement will bring much-needed relief to countless homeowners, including thousands in Florida," said Attorney General McCollum. "I appreciate Bank of America's commitment to rectify the situations created by Countrywide's loan practices."

The agreement, which is still being finalized by the participating states, could provide nearly $1 billion in total relief to Florida homeowners alone and up to $8 billion nationwide, including the realized relief from modified loans. Under the terms of the agreement, the following relief initiatives will be offered:

Home Retention Efforts

Countrywide will launch a new Loan Modification Program for qualifying owner-occupied subprime home loans and pay option adjustable rate mortgages (ARMs) to move borrowers into fixed-rate, fully amortizing loans that they can afford. Additionally, Countrywide will suspend foreclosures on all loans that meet the eligibility criteria while determining whether or not the borrower qualifies for a loan modification, and will waive all loan modification fees associated with a modification under the new program. Approximately 52,000 Florida borrowers are anticipated to receive a loan modification under this plan.

Foreclosure Relief

Countrywide will make cash payments to eligible individual borrowers who have lost their homes to foreclosure after experiencing an early payment default or after an interest rate reset. Early payment default is an indicator that the loan was not underwritten properly and the homeowner could not afford the loan from the beginning, and default after reset is an indicator that a loan was not written to the fully-indexed, fully amortizing rate. Approximately $150 million will be available nationwide with more than $20 million earmarked for Florida borrowers.

Countrywide will also make approximately $60 million in cash payments nationwide to any borrowers in foreclosure who agree to voluntarily leave their home at the time of foreclosure sale. Florida borrowers in foreclosure could receive up to $4 million under the relocation assistance program.

Other Relief

Countrywide will waive late fees for the delinquency that led to borrowers receiving loan modifications under the new program. Approximately $79 million in late fees will be waived nationwide, and $9.7 million will be waived in Florida. Countrywide will also waive prepayment penalties on subprime and pay option ARM loans owned by Countrywide. Approximately $56 million in prepayment penalties will be waived nationwide, and $8 million will be waived in Florida.

Once finalized, the agreement will resolve the allegations against the Bank of America-owned subsidiary in a lawsuit filed by Attorney General McCollum prior to Countrywide's acquisition. The lawsuit asserted Countrywide put borrowers into mortgages they couldn't afford or loans with rates and penalties that were misleading. The company's deceptive marketing practices were purportedly designed to sell costly loans while hiding or misrepresenting the terms and dangers. Bank of America acquired the company the day after the lawsuit was filed and has worked with the Attorneys General to resolve the allegations against its subsidiary.

In addition to Florida, participating states currently include Arizona, California, Connecticut, Illinois, Iowa, Michigan, Ohio, Texas, and Washington.

Additional states may join the agreement in the coming days. Consumers can call Countrywide toll-free at 1-800-669-6607 for additional information.

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Will you be notified by Countrywide if you are
eligible for a loan modification? I do not trust
Countrywide since my bad experience with them.
I applied for a loan modification and they tormented
us for 5 months until they responded with a one word answer, "NO", without any explanation. Originally
when applying for a modification they said it would
take only 2 weeks. It was extremely stressful. Time after time I would call and they would just hang-up after waiting a long time. They would take your information and after working with them for 1 hour at a time they would say sorry my computer went down, that they lost the information. When I sent in paperwork they requested, Countrywide lost my paperwork several times. How can you trust a company that treated us that way. Who will be monitoring this Florida Settlement with Countrywide? We cannot go through this mental torture that they put us through again! This should not be allowed in America!

I'm sorry to hear you have been put through the ringer -it's an all too common complaint and unfortunately it only exacerbates the nightmare and mortgage crises.

You might want to check with the AG's office on whether or not, and how you will be notified.

Please let us know how you make out!

Additionally, you can always post your story "my story" page on this site...

We were misled when we agreed to this loan in the first place and then when after the loan matured and Countrywide had the opportunity to tighten loan requirements, they did. As a result our payments have more than doubled, and have lost thousands and thousands of dollars of value. When we asked for help and gave C'wide all the documentation they requested etc., C'wide never responded. This happened repeatedly for 6 months. Then C'wide decided to call us for about 2 months straight every day, when they already new our financial situation. We still own this house, keep it in good repair, yet every month our financial situation with C'wide gets worse and worse. This finacial crisis has become a nightmare, has tested our marriage and we thank God we have survived the turmoil.
Trust with C'wide has gone right out the window and as well we should be included in this financial settlement but do not trust C'wide to be there for us.

Richard -thanks for sharing your story. It's stories like yours that will help validate what borrowers are and have been facing!

Please continue to update us on how you make out. It is so hard being a David in this Goliath world of greed, power & corruption!

If we didn't have to use c'wide for our loan we wouldn't have. After months of disappointment and them loosing a house for us and loosing all of our paperwork the day of closing. They're a joke.

Countrywide accepted our Shortsale on 10 Feb, with a Due Date of 26 Feb. I received the letter of acceptance. They sent me a letter dated 18 Feb (I received 3 Mar) stating my shortsale was denied. The Foreclosure was filed by a Law Firm on the 20 Feb.

I called the Short Sale Dept, and I was told they havent received any paperwork since Dec. No word on the Acceptance, etc. I asked about the dated letter received to be told it was a mistake they sent it. I was also told it would take 48 hrs for them to receive and post anything. My real estate agent sent the documentation again last week, and a week later they did not receive it. How is that posible?

i have been trying to get countrywide to modify my loan for the past 6 months and have gotten nowhere with them. i have a 6.5 % fixed 30 year loan but was mislead because i have a no documentation loan that was given to me no questions asked no income verification simply because i gave them $60,000. down to purchase the house and i was promised that with that huge down payment my mortgage payments were going to be under $700. a month includuding taxes and insurance ofcourse that was never the case it turns out my payment are twice that amount not to mention that i paid $212,000. for the house i owe 150,000. and the same house is going for 80,000. down the block. i purchased this house based on a appraisal the bank gave me and they get there bailout and i lost my life savings which i put into this house and now they want to take my home too.

Unfortunately, I continue to hear this same complaint from borrower after borrower! These large lenders claim they want to "work with borrowers" but their claims turn out to be hollow and empty. How can consumers build confidence or trust when lies seem to be the norm? If the bailout money was given to families -we would be the ones able to get the economy moving. And in doing so -our purchasing power would then determine just what banks, auto dealers and entities thrived -and which didn't!

Bill McCullom needs to enforce this settlement with Countrywide. They ARE NOT doing what they said they would in the agreement. Ask the several thousand borrowers currently fighting with CW trying to get loan mods about principal reductions, affordable payments, interest rate reductions, etc. C'mon Bill!

Well my home went into foreclosure status in May of 2008. I moved out rather than being thrown out and was given a foreclosure sale date of Dec. 3, 2008. The calls from CW began in January. They said they have no record of a sale date at all. I called the attorney who is handling the foreclosure and they said that the sale date has been postponed by Countrywide until Feb. 23 2009. Today I got a call from CW again. They again said they don't have a record of ANY sale dates. When will the madness end? I just want to move on, but can't because they tell me I'm foreclosed on, and then that I'm not foreclosed on. This is insane.

I had a CW mortgage loan in Fla. I should not have been approved. Tried to sell, tried short sale, tried deed-in-lieu, nothing worked. CW started foreclosure proceedings. 1st court date postponed due to "LOST DOCUMENTATION", 2nd date postponed. CW won in court. Sale date set for March 09. Cancelled and reschedule requested. Now I know why!
This announcement on July 23, 2009, http://newsroom.bankofamerica.com/index.php?s=43&item=8504
states that BOA is sending notices for "assistance for certain borrowers who experienced a foreclosure, short sale or deed-in-lieu of foreclosure on their mortgage originated by Countrywide."
Then I read the eligibility requirements that states the following:
"In order to be eligible to for a payment under the settlement you must have lost the property securing the loan through foreclosure, deed in lieu of foreclosure, or a short sale between January 1, 2004 and March 31, 2009. In other words, the foreclosure process must have been completed by March 31, 2009."

There you go! BOA/CW continues with delay tactics and postponements until borrowers become ineligible for assistance of the program they were ordered by the courts to provide.

I am going to get an attorney!

I was called this week about our modification loan. The person took down our address of our home and told me that they would be sending out some papers about the modification that has been done on our mortgage. It was coming to us by Federal Express. I want to know where and when are these documents coming to us? Please let us know! My husband has just had major shoulder surgery on this past Tuesday. He is going to be off work for at least 5 to 6 weeks! He has insurance, Short Term Disability, but we are waiting papers from his doctor where he completed insurance papers, and there is a week waiting period until they make a decision about his Short- Term Disability. We have been making our payments of $711.76 on out mortgage, but this month we are not able to make that payment until he gets his Short Term Disability! We do not want to loose out home because of this, or mess up our not being able to get the modification. I have been told everytime I call we have already been accepted for the modification on our loan. Please, I am disabled to work because of a mental illness, and I have been told by my attorney that I am getting closer to my court date for my Social Security Disability! Please help us! I will be calling Bank of America Monday, about this problem.

OK, Amalia's story is the same as mine was when I bought my place in 2006, put down half, payments to be about $525-$535ish, Countrywide low/no-doc loan, interest rate 30-yr fixed 6.75%, appraisal came in for sales price. Same story trying to get help in 2008 - and they also screwed up a refi attempt that I cancelled out of at closing. Told me to get late on payment, got late a month, they said still didn't qualify for help, flip-flopped for 5 or 6 months, misapplied a payment, foreclosed in haste in 2009 without putting me into HAMP when announced. Got foreclosure dismissed, but I was billed for all the fees as if it had gone through.

Finally was in HAMP, they included the dismissed fees in the final mod capitalized amounts - made them take it out, they delay months and months and don't apply payments on time, then kick me out. A year later, they foreclosed again, after various bizarre actions and responses to my requests. Like Amalia, I cannot do a short sale or deed-in-lieu because my retirement (life) savings are in the house (plus another +- $30k in renovations/repairs), and they and BofA since, have been amazingly abusive all along. I am fighting the new foreclosure pro se, with a bunch of counterclaims for the fraud and abuse. The judge seems pro-lender, of course.

If you ever got anything from that settlement from 2008 for Countrywide victims of predatory lending, please let me know - I didn't and BofA says I am not eligible even though my state participated, the loan was predatory, etc, no explanation. And now they screwed us on the most recent settlement by cancelling the levels of payment and just dividing it up...we'll see if that happens!

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