Various states this week began notifying consumers that money is now available from the $150 million settlement negotiated with subprime lender Countrywide Financial last year. The company is now part of Bank of America.
Bank of America said today that letters are being mailed to borrowers who may be eligible for the foreclosure relief program included in an agreement with state Attorneys General announced last October. Up to $150 million is allocated nationally to provide assistance for certain borrowers who experienced a foreclosure, short sale or deed-in-lieu of foreclosure on their mortgage originated by Countrywide. Participating states may have additional eligibility criteria.
The funds are part of a settlement Attorneys General negotiated as a result of questionable lending practices exercised by employees of Countrywide, including predatory lending.
"Countrywide took advantage of families trying to achieve the American dream," said Michigan Attorney General Mike Cox. "Through this settlement, families across Michigan will receive a helping hand."
In order to be eligible for the settlement, borrowers had to receive a Countrywide Financial loan between January 2004 and December 2007. The borrower's home had to be foreclosed on between January 2004 and December 2008. Those eligible received sub-prime loans or pay option loans (e.g. adjustable rate mortgages) and later lost their homes. Eligible borrowers will receive a letter from their state attorney general, claim forms, and postage-paid return envelopes.
Forty states are participating in the program and have been allocated funds. Borrowers will be notified by letter from their state if they are eligible to receive a settlement payment. Payment amounts will vary.
Eligible borrowers have until October 22, 2009 to return the claim form to Countrywide Financial's settlement administrator. It is expected that the eligible borrowers will receive payment from Countrywide in early 2010.
