MA Attorney General obtains 3 Billion from Mortgage Giant

Massachusetts Attorney General Martha Coakley reached an agreement with Countrywide Financial Corporation or rather the company that took over bought Countrywide out; Bank of America. Bank of America appears to have come to terms with the fact that it is going to pay for purchasing Countrywide Financial Corporation and pay significantly.

The agreement the Attorney General’s office reached with Bank of America will provide approximately eighteen million dollars in loan modifications for homeowners in Massachusetts; three billion in loan modifications for homeowners throughout the country and four million one hundred thousand dollars in payments to the Commonwealth of Massachusetts.

The settlement between the Commonwealth and Bank of American was filed on March 24th in Suffolk Superior Court. The settlement expands the previous 2008 agreement that Countrywide reached with forty three State Attorney Generals and the District of Columbia. The previous agreement was to allow loan modification for borrowers that were delinquent and the expanded agreement builds on the standards of the Home Affordable Modification Program set forth by the United States Treasury Department.

Massachusetts Attorney General Martha Coakley and her office have been completely steadfast in their efforts to hold the Mortgage Giant responsible for the foreclosure crisis that has stripped this nation’s economy and left thousands of homeowner’s victims.

Attorney General Martha Coakley stated “with today’s action we have secured billions of dollars in relief to help keep thousands of families in Massachusetts and across the country in their homes. This settlement provides for principal loan reductions that will help put thousands of people back on the road to financial recovery.”

The principal forgiveness described in the settlement applies to delinquent borrowers in the Home Affordable Modification Plan that have eligible Pay Option ARMS, Two year prime ARMS and Subprime 2,3,5,7 and 10 year Hybrid ARM loans, who currently owe more than 120% of the homes current market value on the first mortgage. It allows for those who are currently at risk of default, in default and or those were the unpaid balances increased due to negative amortization in excess of ninety five percent of the properties current fair market value. The new expanded settlement literally qualifies hundreds of Massachusetts homeowners and the expected relief in Massachusetts principal forgiveness is approximately eighteen million dollars. The expanded criteria is also expected to bring relief to consumers nationwide in the amount of three billion dollars.

Customers seeking information should contract Bank of America Home Loan Customer Service at 1-800-669-6607 or online at .

Bank of America will implement a Mobile Assistance Unit according to the settlement that will travel across New England and provided consumers with face to face loan modification assistance, resources and information to distressed borrowers who had Countrywide originated home loans.

Bank of America will also pay the Commonwealth of Massachusetts four million one hundred thousand dollars. Two million four hundred thousand of that money will be distributed to borrowers who had Countrywide home loans and have already lost the property due to foreclosure. One million seven hundred thousand dollars of the money will go to cover the cost of the litigation and investigation that was required to obtain the settlement.

The largest subprime lender in the State of Massachusetts between the years 2006 and 2007 was Countrywide Financial Corporation. Massachusetts filed a suit against the lender in Suffolk Superior Court that alleged that company engaged in unfair lending practices by originating 2 and 3 year Hybrid Adjustable Rate Mortgages, Payment Option Adjustable Rate Mortgages and Interest Only Loans without considering the borrower’s ability to repay past the introductory rate period. Countrywide Financial Corporation on July 2008 was purchased by Bank of America Corporation prior to a merger agreement in January 2008. The terms of the settlement made Bank of America Home Loans Services, L.P the primary servicer of all of Countrywide Financial Corporations remaining loans. The lawsuit is the Attorney General’s initiative to combat predatory lending practices through litigation, regulation and education.

The Attorney General since taking office in 2007 has taken a focused multi-faceted approach to fighting the foreclosure crisis and assisting Massachusetts homeowners. The Attorney General’s Office issued an emergency regulation that banned predatory foreclosure rescue schemes and issued a consumer protection regulation that regulated mortgage brokers and lenders within the state.

The Attorney General’s Office has also filed suit against Fremont Investment and Loan and Option One. The office has also undertaken inquiry into the role that securities play in the mortgage industry; including those that bundle loans and sell them as mortgage backed securities. The office was able to reach a settlement with Goldman Sachs in the amount of sixty million dollars in May 2009.

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