Countrywide settlement to help fight foreclosures

By Mary Manning

Monday, Oct. 6, 2008 | 5:33 p.m.

Attorney General Catherine Cortez Masto said today that Nevada is one of several states that has reached an agreement with Countrywide Financial that will help almost 400,000 borrowers across the nation who are facing foreclosure.

Mortgage lender Countrywide Financial Corp. has agreed to provide loan modifications to up to 397,000 borrowers nationwide under the settlement.

The states involved in the settlement estimate that relief to borrowers could equal about $7 billion to $8 billion nationwide.

The tentative agreement was reached late Sunday by the states involved and Bank of America, which acquired Countrywide Financial on July 1.

"Our citizens are suffering from the mortgage foreclosure crisis," Cortez Masto said. "We lead the nation in foreclosures. My office has been working with Countrywide and the larger settlement states to bring some immediate relief for Nevada homeowners."

The details are still being drawn, Cortez Masto said.

The loan modification program includes the suspension of some foreclosures for eligible borrowers with subprime and adjustable rate loans; waiver of late feels of up to $2.2 million; $3 million in payments to borrowers who are 120 or more days delinquent or whose homes already have been foreclosed upon; and about $4.8 million in additional payments to borrowers who, in the future, will be unable to afford monthly payments under loan modifications and lose their homes to foreclosure.

Countrywide said the loan modification program will be ready by Dec. 1.

Countrywide subprime customers who want more information should call 1-800-669-6607. Information soon will be posted on Countrywide's Web site at www.countrywide.com.

The tentative settlement resolves allegations that Countywide used unfair and deceptive tactics in its loan origination and servicing activities and that borrowers were put in structurally unfair and unaffordable loans. Countrywide is the largest provider of subprime mortgages in the U.S.

The Bank of America/Countrywide settlement resolves investigations into Countrywide's lending practices in Arizona, Iowa, Nevada, Ohio, Texas and Washington. The settlement also resolves lawsuits against Countrywide initiated in Illinois, California and Florida.