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A Countrywide Settlement

posted by Angie Littwin

Bank of America has agreed to settle a deceptive mortgage practices lawsuit on behalf of its relatively new subsidiary, Countrywide Financial, the notoriously aggressive mortgage lender.  The attorneys general of Illinois and California negotiated the settlement on behalf of their states and at least nine others. The settlement will cost BOA approximately $3.5 billion in California and $190 million in Illinois. The settlement funds will go towards reducing payments for Countrywide borrowers with subprime and/or adjustable-rate mortgages, waiving prepayment and late fees, paying damages to customers who have already lost their homes, and subsidizing the relocation of those who are now in foreclosure.

A BOA spokesperson said that the bank plans to introduce the program in December. Hopefully more details about who will qualify will be available soon.

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Yeh way under reported. Wonder how many people could have survived the past month if they would have known things were going to change with their mortgage?
OK sounds great. How are they going to decide where the money goes? Funny how we didn't hear until 700 billion was passed and then coincidently an agreement is reach with BOA....Oh yeh and funny "the 700" legislation includes a clause that allows banks to not honor exclusitivity agreements. IE Citi and Wells
Call me crazy but feels more and more like everyone except the government and the big banks are getting screwed without even being taken to dinner.

The WSJ this morning is reporting the value of the settlement at over $8 billion. Any info on that, Angie?

Oops. Commented too soon. Your article from the Chicago Tribune reports the total settlement at a little over $8.8 billion.

Is Texas one of the 9 other states? lmclark or Angie or anyone for that matter.

lmclark- Do you think we could get those Mods thru in the context of them already being in 13? What if we already have a confirmed 13 or in the case of Chapter 7 does the 7 Trustee have a right to recover? Most likely debtors would not have listed it as a contingent or unliquidated claim.

Texas is on board. According to last night's NYT article (which has not been updated since about 1 am), the nine other states are: Arizona, Connecticut, Florida, Iowa, Michigan, North Carolina, Ohio, Texas and Washington. Even though the Chicago Tribune article was updated more recently, it reports that North Carolina and Michigan are still negotiating, along with West Virginia and Indiana. The Tribune also does not mention Florida at all. Hopefully the states that are involved, among other things, will become more clear as all the settlements are finalized.

Thank you so much Angie!

Now I just need to nail down how that can help our current and future Chapter 13 debtors. Re-working a confirmed 13 Plan when we have mortgage arrearage already in there will be a bit tricky especially when it comes to unsecured creditor disbursements and accounting for funds already disbursed to the Mortgage Creditors. I don’t know if B of A fka Countrywide will rework ARMS into Fixed or what? I have no clue on how it will affect the people who surrendered their homes in Chapter 13. What they need to prove…. ooouuuuiii!!!! Got some research to do….. All helpful tips welcome.

Thank you so much Angie!

Now I just need to nail down how that can help our current and future Chapter 13 debtors. Re-working a confirmed 13 Plan when we have mortgage arrearage already in there will be a bit tricky especially when it comes to unsecured creditor disbursements and accounting for funds already disbursed to the Mortgage Creditors. I don’t know if B of A fka Countrywide will rework ARMS into Fixed or what? I have no clue on how it will affect the people who surrendered their homes in Chapter 13 already. What they need to prove if anything? ooouuuuiii!!!! Got some research to do, I guess thats why I get paid the big....well, I don't so oh well. Will have to figure it out anyway! All helpful tips welcome. Great Post BTW.

The devil, of course, is in the details. We still do not know who will be eligible, and it appears the biggest benefits will go to those with loans currently owned by Countrywide (portfolio loans). The BofA press release states:

-----
The program applies to eligible mortgage loan customers serviced by Countrywide and who occupy the home as their primary residence. Under the national program, Countrywide will not charge eligible borrowers loan modification fees, and Countrywide will waive prepayment penalties for subprime and pay option ARM loans that it or its affiliates own. Some loan modifications will be subject to compliance with servicing contracts and some will require investor approval.
-------

Note the benefits for loans "it or its affiliates own." Portfolio loans make up a small percentage of loans originated by Countrywide. Most were securitized. Other loan modifications will be subject to limitations in the Pooling and Servicing Agreements and may require investor approval. Just a guess, but it seems we unlikely to see many loan mods if those mods are not permitted by the PSA or require investor approval. We don't seem to be getting many affordable, sustainable loan mods even when they are permitted by the PSA and do not require investor approval.

I just contacted Countrywide/BOA on 10/6/08 to ask them about their "New Nationwide Homeownership Retention Program" & OMG!

Well I got transferred six times...& each time I was transferred I had to repeat my account#, address, last 4 SSN digits and name.

Finally the last Countrywide/BOA Rep. told me that they had heard about this "New Program" but did not have any info and to call back in a week...well ok!

One Countrywide/BOA Rep. had the nerve to tell me "you haven't missed a payment so far, so what's the problem?" what's the problem?...you just sent me a letter stating that the mortgage I've been paying for the last 3 years is more than doubling in a few months and my house value has dropped almost 50%...are you kidding me!

WTH is going on? Can you imagine what Countrywide/BOA would be like if this lawsuit had not been settled.

Hey Countrywide/BOA...it's time to start work with your customers...most of us still have a chance to keep our homes if a "FAIR LOAN" can be restructured!

I think you will find most hard working Americans are ready & willing to work out a "FAIR Solution" with you so we can pay our mortgages each month.

Please work with us when we call about restructuring these loans and stop transferring us to your employees who "don't know anything" or "talk down to us...remember that you helped create this mess as much or more than we did...buddy!

We will see if Countrywide/BOA is really serious about working with their customers to fix this mess or if their just spewing more self serving hot air.

And also one last thing to Countrywide/BOA....."didn't you get the TPS memo".....YOU SETTLE THIS LAW SUIT...SO DUST OFF, HELP YOUR CUSTOMERS AND GET READY TO BE A HERO TO MANY AMERICANS!

http://www.chron.com/disp/story.mpl/front/6043726.html

Countrywide deal provides options for those struggling

It may help 30,000 Texas homeowners

By GARY SCHARRER

AUSTIN — An estimated 30,000 Texas homeowners with mortgages from Countrywide Financial may get friendlier loan terms through a settlement announced Monday to help rescue those in over their head.

The deal, involving the company and several states, allows eligible homeowners to modify terms of their loans to make monthly mortgage payments more affordable.

The loan modification program affects Texans who are in default or likely to default on subprime mortgages from Countrywide, a financially struggling company recently acquired by Bank of America.

http://blog.cleveland.com/business/2008/10/countrywide_settlement_gives_8.html

Countrywide settlement gives 8,000 Ohio homeowners a break

By Teresa Dixon Murray/Plain Dealer Reporter October 06, 2008 17:41PM

More than 8,000 Ohio homeowners who got lousy high-rate loans from the largest mortgage lender in the nation will soon get a break.

Countrywide Financial, in a settlement with Ohio and 10 other states, agreed to reduce interest rates and, in some cases, forgive principal for people who face foreclosure or are at least two months behind on payments.

"The goal . . . is to create an affordable mortgage," said Andrea Seidt, deputy chief counsel with the Ohio attorney general's office.

More than half of Countrywide's subprime customers in Ohio are behind on payments, Seidt said.

http://www.signonsandiego.com/news/business/20081007-9999-1b7country.html

Countrywide settlement to bring relief to S.D. County

By Emmet Pierce
UNION-TRIBUNE STAFF WRITER

October 7, 2008

Hundreds of San Diego County homeowners now facing foreclosure will benefit from the settlement of California's predatory lending lawsuit against Countrywide Financial Corp., Attorney General Jerry Brown said yesterday.

The resolution of the suit, which was filed in June, “is not going to change the world, which is deeply disturbed and flawed, but it will provide relief for hundreds of people” within the county, Brown said.

Looked at Countrywids web site and it is not supposed to start until December 1. From Gregg Abbots web site they mention “qualified” borrowers (like it will be easy) but Countrywide wed site has the conditions tt explained. So it depends on the Pooling and Servicing Agreement some will need a vote and others are SOL on that as well. Isn’t that what we have now? How is this better? Plus the Texas Attorney Generals web site directs debtors to Countrywides web site for information about the agreement. Does that sound crazy to anyone but me? Go to the site and you will see that the “program” is in the far right hand side of the page in small lettering under “Protect Against Fraud” and is labeled “Learn About Financial Hardship Assistance Program”. I guess it would be too much to ask for them to place the information link more prominently.

So it’s a crap shoot right? How are the AGs’ going to monitor compliance with the agreement when the new agreements still depend on an investors vote and on the Pooling and Servicing agreement? What about the people in Bankruptcy who have already surrendered their home because they could not afford the Option ARM rates? What do they get? I know if they do get anything, we will have to get approval from the BK judge. Plus we probably didn’t put it in their Statement of Financial Affairs to begin with. A link to the actual agreement would be helpful if anyone knows where to find it? Here is the Link to the “Program” http://my.countrywide.com/media/FinancialAssistanceEN.html

The only loans that can be modified are those BofA/CW still holds the securities for and is still servicing them.

CW did far more retention and servicing of its own loans than most other subprime lenders, but they sold many, and any that were taken through the securitization process into some other non-CW trust can't be modified without the cooperation of that trustee.

It's luck of the draw depending on whether your loan is still a CW asset.

The other thing to keep in mind is that this will be driven as a loss-mitigation strategy; the truly toxic mortgage with a borrower with insufficient income is still going to be foreclosed on.

As for BK cases, IMHO the creditor's proof of claim will identify the trust, and the ownership of the trust can be determined from SEC reports. If it's not a CW entity and CW isn't servicing it you can be pretty sure no modification is going to be offered.

Judge Roy Bean says that the truly toxic mortgage with a borrower with insufficient income is still going to be foreclosed on. That should be no surprise to anyone, though its also important to remember that lenders don't necessarily win with a foreclosure. It costs money to foreclose, and if the property is sold to a third party at foreclosure, the price is likely lower than it would otherwise be with a longer exposure to the market. The lender might bid in, but then has the carrying cost of the house (the loan is no longer performing, and its no longer throwing off income for the securitization pool). And in the current market, one more house added to the supply is not exactly good news for any seller -- including the lender who might now own the house.

Everybody's in jail here.

"Everybody's in jail here."

Not AIG! They're tan, rested, and ready to par-tay!

http://news.yahoo.com/s/ap/20081008/ap_on_go_co/meltdown_aig;_ylt=AuMCgMs59xLfyo2lmSz7NISs0NUE

Execs' posh retreat after bailout angers lawmakers

By ANDREW TAYLOR, Associated Press Writer
Tue Oct 7, 10:57 PM ET

WASHINGTON - Days after it got a federal bailout, American International Group Inc. spent $440,000 on a posh California retreat for its executives, complete with spa treatments, banquets and golf outings, according to lawmakers investigating the company's meltdown.

I heard that and it’s not the servicers in jail either. What about the MIP Insurance? I can see though the burden of having the home on the market.

What had happened to me was that I bid on a REO (Countrywide) offered full asking price. They accepted and after inspection we tried to negotiate for them to repair or replace the AC (have to have AC in South Texas plus we were FHA) approx cost $4k. Well, they rejected the amendment and refused to negotiate. Long story short, we back out and now they have re-listed the property "as is" now at $3k under their previous asking price and are offering $1k in credit. ??? Do they really want homes off the books or what?!

As a customer of CW I spoke with a represenative and was told that we may qualify for one of the programs that there wasn't any available information except for what was listed on the website. I'm three months behind on my mortgage I hope this can help us. We are working on getting caught up however a repayment plan wasnt an option because it would be extremly to high. We had no idea what an adjustable mortgage was and was convienced by our lender that in twelve months it would be no problem to refinance to a lower rate. What a lie. My heart goes out to the others like us who are struggling. God Bless.

Laura- if you are already in some state of foreclosure already you may want to look at different options (like now!), unless that is they give you more time (in writing). That program, “should you qualify” (I don’t know of anyone who knows for sure who will and will not qualify) will open its doors on December 1st 2008 (per CWs’ web site). A friendly or not so friendly call to your states Attorney General “may” get you some more info. Don’t wait until the last moment, foreclosures are crazy that way. Good luck.

Thanks. We was told by a represenative on our file it had a notice that we appear to have pre-qualified for atleast one program. I saw that they arent allowed to forclose until review to see if one may qualify. We are paying two or more payments monthly to get caught up. Keep us in Prayers.

I spoke with an account representative at Countrywide on the 7th of Oct. and informed them of the BOA statements listed on the Internet regarding suspension of all foreclosure proceeding till the loans were reviewed for eligibility for the Hope program or loan modification. I informed them I had a hearing the next day for setting a sale date and was it going to be cancelled in accordance with the BOA statement of suspending all foreclosure proceedings. They told me not to apply for the hope program as that would kill the modification request, and that the hearing was probably not to set a sale date and be patient, well guess what they did set a sale date though it is 60 days from yesterday it still was not suspended as per the BOA statement and the Judge told me he could not take the paper printed out of the internet posting. So here I am with a sale date and nobody with any info as usual and I feel I have been lied to again I thought the settlement was made and would be honored I guess I was wrong again and have been fooled by the Govt. and Countrywide and BOA.

Jimmie if you don't mind me asking since I'm in default as well, how far behind on your payments did you get before you was notified of a sale date and what contact did they have with you to let you know of a sale date?

I'm also a cw customer with an option arm loan and I called CW because I heard about the new programs and he flat out said I didn't qualify. I was like excuse me I have a option arm loan I bought my home between the stated time and my house is worth 50 thousands less then when i bought it.I thinkthey are trained to act like they are not aware of anything at this point. I can't wait til Dec.1 to get that call. Wish u all the best

I was also a victim of Countrywide more or less stole
my home from me and sold it to
the same buyers I had and I had
a lawyer as a witness to this.
Also they got everything I owed
plus more and they still have on
my credit that I owe them which
is stopping me to get any type
of loan. Please let me know if
you can help.

I was also a countrywide dumby. My husband had a masseve heart attack the day after Christmas 2006 we begged Countrywide to help us keep our home needless to say they foreclosed and auctioned of our home to a bank in New York for $100.00 dollars uur home was apparised that year for $240.000.00.So I hope everyone is awear of what this company is doing.

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