Relief for Troubled Countrywide Sub-Prime and ARM Mortgage Holders

Bank of America Agrees to $8.4 Billion Settlement on Countrywide Loans

Relief may be on the way for some Countrywide borrowers to keep their homes. The the Daytona Beach Florida real estate markets, and others where prices went up because of speculation and freely available mortgages, this can help a lot of people.
On July 1st, Bank of America bought Countrywide. Several state Attorneys General had filed lawsuits against Countrywide because of their lending practices. An agreement has been reached for a program with Bank of America that is designed to allow borrowers who purchased their homes through sub-prime or certain adjustable rate mortgages before December 31, 2007 to keep their homes.
If you are one of the families “who are seriously delinquent or are likely to become seriously delinquent as a result of loan features, such as rate resets or payment recasts,” then the program may be for you according to Bank of America.
Countrywide staff will begin contacting eligible mortgage clients by December 1 and will not begin or continue foreclosure action against a borrower who may be eligible for the program.

Borrowers will need to prove they can pay the first year payments. The bank will expect that principal, interest, tax and insurance payments will equal, 34% or less of the borrowers income.

Loans could be modified through FHA refinancing, reduced rates, or reducing the pay-option ARM requirements. No fees will be charged to modify the loans and prepayment penalties will be waived.

$150 million is being set aside to help Countrywide borrowers who are already in foreclosures or in serious risk of foreclosure. $70 million will be paid to borrowers who lost their homes to help with the move to their new homes.

If you are a Countrywide borrower who may be eligible for the program, they will contact you. I imagine if you called today, they would have very little information. You should hear from them after December 1st.

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