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Ohio to Get $4.39M from Countrywide Settlement

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Mar 10, 2007
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Certified General Appraiser
Ohio to Get $4.39M from Settlement

COLUMBUS, Ohio -- As part of a final settlement with Countrywide Financial Corp., some 8,000 Ohio homeowners will be eligible for loan modifications and another 4,000 Ohioans will be eligible for foreclosure relief payments. According to the settlement details, the Buckeye State will receive $4.39 million as its share of a $150 million nationwide settlement with the mortgage lender.

Earlier this year, Countrywide agreed to a settlement that will provide loan modifications for 400,000 borrowers nationwide. The actual value for borrowers as a result of this settlement is between $7 billion and $8 billion, according to Nancy Rogers, Ohio attorney general.

Countrywide customers in Ohio should watch their mail for a letter that will notify them of their options under the terms of the settlement. Eligible subprime borrowers will be offered loan modification options designed to make monthly payments more affordable. Those options will include a freeze or reduction in interest rates, conversion to a fixed-rate loan, and a reduction in the principal balance. Eligible borrowers who experienced a foreclosure sale will be offered foreclosure relief payments estimated to be between $500 and $1,500.

As part of the agreement, Countrywide agreed to stop offering pay-option adjustable rate mortgages and significantly curtail offering low-documentation and no-documentation loans, initiate an early identification program to contact borrowers who are having trouble making their payments and continue working with nonprofits, federal agencies, and state attorneys general on ways to use real estate owned and other properties for community development.

This systematic, streamlined approach to loan modification is a critical first step and a win for everyone, Rogers said. "Foreclosures have devastated our communities and crippled our economy, and this moves Ohio a step closer to reversing that trend," she noted. "I strongly encourage other lenders and mortgage servicers to follow suit with similar programs."

The final judgment resolves allegations that Countrywide used unfair and deceptive tactics in its loan origination and servicing activities, and that borrowers were often placed in structurally unfair and unaffordable loans. The agreement does not constitute an admission of wrongdoing on the part of Countrywide.

Ohio's $4.39 million settlement includes $1 million that will be dedicated to foreclosure prevention efforts. The Ohio Attorney General's Office will distribute the money and review written proposals. Criteria is expected to be posted on the Web site no later than Feb. 1, 2009.

Bank of America acquired Countrywide Financial on July 1. Bank of America has agreed to fully support and fulfill the terms of the settlement agreement, Rogers said.

Countrywide customers in Ohio who want more information may call Countrywide at (800) 669-6607.
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