Virgina Joins Nationwide Settlement With Countrywide

admin —  January 19, 2009 — Leave a comment

Virginia Attorney General Bob McDonnell joined a nationwide settlement agreement with Countrywide Financial Corporation. The settlement will provide about $8.4 billion in home loan and foreclosure relief to as many as 397,000 homeowners across the country, including projected relief of $212.8 million for more than 8,900 homeowners in Virginia. Countrywide was acquired by Bank of America Corporation in July 2008. In addition, the Attorney General will propose legislation in the General Assembly to provide further assistance to Virginia homeowners during this tough economic period.

“This settlement will provide crucial financial relief to thousands of Virginians who are struggling each month to pay their mortgages and keep their homes,” Attorney General McDonnell said. “I hope this settlement will serve as a model for other mortgage lenders to follow as they develop plans to help homeowners facing foreclosure.”

Under the settlement, Countrywide and its affiliates agree to modify loans for eligible borrowers so they are better able to keep their homes. Borrowers eligible for loan modifications are those who received either a qualifying subprime adjustable rate mortgage or a Pay Option adjustable rate mortgage prior to Dec. 31, 2007 and who meet other specific requirements.

Depending on the type of loan, modifications may include an automatic freeze or reduction in interest rates, conversion to fixed-rate loans, or refinancing or reduction of the principal owed. Under the modifications, first-year payments of principal, interest, taxes and insurance will be targeted to equal 34 percent of the borrower’s income.

In addition, Countrywide agrees to pay a total of $150 million nationwide under a Foreclosure Relief Payment program for particular borrowers who either already have lost their homes or are at least 120 days delinquent. Virginia’s share of this amount is approximately $2.5 million. Countrywide also agrees to pay up to $70 million nationwide for relocation assistance to borrowers who do not qualify for a loan modification and who subsequently face foreclosure. Virginia’s projected portion of these payments is estimated at $2.3 million.

Finally, Countrywide agrees to waive prepayment penalties, late/delinquency fees and default fees otherwise due from eligible borrowers. Virginia’s estimated total of these waivers is $3.3 million.

On December 1, Countrywide began sending mailings to eligible Countrywide borrowers notifying them of the modifications that may be available under the terms of the program. Countrywide customers who have questions about their eligibility for a loan modification are encouraged to call Countrywide toll-free at 1-800-669-6607 or visit the company’s website at

The settlement resolves any potential consumer protection claims the Attorney General could have filed alleging deceptive practices arising out of the mortgage origination or servicing activities of Countrywide in Virginia.

Be Sociable, Share!


Posts Google+

No Comments

Be the first to start the conversation.

Leave a Reply

Text formatting is available via select HTML.

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>