16 Feb Texas Attorney General Begins Restitution Program for Countrywide Customers
As part of the largest predatory-lending lawsuit in history, Countrywide will use $8.4 billion to modify mortgage terms for 400,000 borrowers in Texas and ten other states who received unaffordable loans from Countrywide.
The Texas AG’s office initiated an investigation into allegations that Countrywide encouraged homeowners to accept loans they could not afford, failed tofully disclose risky loan terms to borrowers, and wrote loans for unqualified borrowers in an effort to increase their market share.
The restitution program will make $7.46 million available toCountrywide Financial Corp residential mortgage customers who lost their homes to foreclosure or whose payments were 120 days or more delinquent as of October 8, 2008. This amount equates to approximately $2300 per eligible borrower.
Under the settlement agreement’s home loan modification provisions, eligible home owners can modify the terms of their residential mortgage so that monthly mortgage payments are more affordable. Modified loan terms will vary according to each home owner’s circumstances. Potential modifications include: interest rate freezes, interest rate reductions, loan term extensions, conversions from adjustable rate loans to fixed rate loans, and principal reductions.
Eligible borrowers who participate in the program will not be charged late fees, loan modification fees, foreclosure fees, or pre-payment penalties. If you believe you are eligible for the loan modification program, you should visit Countrywide.com or call (800) 669-6650.
For borrowers who can’t afford to refinance their home mortgage and are in default – or are likely to be in default, the settlement provides relocation assistance of up to $2,000 through the “Relocation Assistance Program.” However, the homeowner will be required to “voluntarily and appropriately” turn over their residence.
Approximately 3,260 Texans are eligible for restitution.
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