I received an email yesterday from one of my favorite lenders, Gary Umholtz:
SPRINGFIELD, Ill. – Facing a lawsuit over deceptive mortgage practices, Bank of America Corp. is agreeing to pay more than $8 billion to modify hundreds of thousands of loans to keep people from losing their homes.
Charlotte, N.C.-based Bank of America said Monday it will modify troubled mortgages with up to $8.4 billion in interest rate and principal reductions for nearly 400,000 customers of Countrywide Financial Corp., the troubled mortgage lender it acquired last summer.
The announcement arrived after the Illinois attorney general’s office said Sunday that the bank was modifying loans for customers in 11 states.
Some borrowers stuck with Countrywide customers might qualify for 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.
“This is going to provide a tremendous amount of relief,” said Illinois Attorney General Lisa Madigan.
Her office and officials from California negotiated the settlement; Illinois and California sued Countrywide earlier this year. Nine other states have also joined the settlement, and other states could sign on, said Deborah Hagan, chief of Madigan’s Consumer Protection Division.
In California alone, the settlement will offer $3.5 billion in relief. For Illinois, that would translate to $190 million.
“Countrywide’s lending practices turned the American dream into a nightmare for tens of thousands of families by putting them into loans they couldn’t understand and ultimately couldn’t afford,” California Attorney General Jerry Brown Jr. said in a statement Sunday.
The other states joining the settlement are Arizona, Connecticut, Florida, Iowa, Michigan, North Carolina, Ohio, Texas and Washington.
Bank of America said it will launch the new mortgage aid program in December.
In a statement, Barbara Desoer, president of Bank of America’s mortgage, home equity and insurance services, called the plan “a comprehensive program that provides more solutions than ever before to assist troubled borrowers and put them back on the path to sustained home ownership.”
The mortgage aid includes revising customers’ payments so they don’t exceed 34 percent of income. Other options include reducing interest rates and adjusting principal so that borrowers don’t wind up actually losing equity under some payment plans.
Countrywide will not charge loan modification fees and will waive prepayment penalties.
Madigan said she hopes the settlement could serve as a model for steps that other lenders could take to make up for misleading mortgage practices. She stressed that the agreement involves no tax money but will help people keep their homes and keep money flowing to lenders
“This settlement will help homeowners stay in their homes, which ultimately helps investors and also helps communities,” said Madigan, a Chicago Democrat.
Categories: Distress Sales, Financing, Marin County, Market Updates, Real Estate, San Francisco Bay Area, Uncategorized
Angelo, you gave your WORD ! ! !
By praetorian5
After the murder of our oldest son and the subsequent financial firestorm that ended in us losing our home to foreclosure,(and this was AFTER, a plan was worked out with C-wide to come current), I spoke with Mr. Mozilo, PERSONALLY, on the phone, at his office…..and the man assured me that although they sold my home illegally, he would personally see to it that we got our home back. Yeah, right! In a pig’s eye. They assigned us a supposed in-house attorney? (somewhere in Santa Monica), who then in turn immediately sent us an unlawful detainer. I immediately filed suit against C-wide and the U/D was rescinded. We asked where to send the pmts and how much until the modification was complete. The attorney told us to hold onto the funds for the initial pmt on the mod, so we did. The mod was introduced in Sep,’08 and was tiered, putting us in a worse situation than we could imagine. Needless to say, we rejected it. Hell, The numbers weren’t even consistent from one page to the next. Anyway, They sought a demurer on the complaint, seven months after it was filed, (isn’t that kind of LATE?), citing non-payment, AFTER they told us to hold the payment until the ink was dry on the modification, and the #@%K&%* judge granted it, without allowing me to speak because although I have been married to my wife for 31 years and the home was purchased with my G.I. bill, and the fact that the title is in her name, I am not a lawyer. Now I have to refile. We are tired. This is the end of our American dream. My question is this….and it is for Mr. Mozilo…….were you just blowing me off when you PROMISED my family we would get our home back, that was taken unethically, and illegally from us? Or were you just passing the buck to the mysterious Dan Whitehead? OR……did you really mean what you said, and this is just some rogue attorney out to put another feather in his cap? My father always told his sons that a MAN’S word is his bond and right now your word is about as good as waterbased mucilage. Mr Mozilo……….WHY?