Countrywide has made a deal with Ohio to improve its mortgage loans and to help people in need refinance. This means that, in addition to the monetary compensation that Countrywide has agreed to pay to thousands of families, those families who have already lost their homes will also receive a one-time payment/settlement. Ohio is receiving around $44 million as part of a $150 million settlement from Countrywide Financial Corporation.
The Ohio Attorney General said that over 8,000 subprime mortgage customers in Ohio will be eligible for help. This means that these customers will either be given a new loan with more favorable terms, or will have some of the money they owe forgiven. This means that people who have difficulty paying their mortgage each month will be given the opportunity to change the terms of their loan so that it is more manageable. This could involve lowering the interest rate, extending the length of the loan, or changing the monthly payments in some other way.
Most of the borrowers who receive assistance from the settlement will either not have to pay anything back, or will only have to pay a small amount back. They might have taken out a home loan with an adjustable interest rate, which would allow them to make lower payments on that mortgage. The monthly payment did not cover the interest charges, so the debt increased each month. Option ARMs are loans offered by Countrywide that can be harmful to the homeowner. Many people never paid any of their original mortgage balance from these option ARMs.
Other families who will receive help include those who took out high-interest loans from subprime lenders. In these cases, it is very well possible that the borrowers did not have bad credit. Despite the high interest rates, Countrywide and their mortgage brokers still lent money to the borrower. Basically, Countrywide tricked some less experienced homeowners. This is a potential fraud on their part.
The settlement may provide some financial relief, it can help make sure the company makes changes to improve safety, and it can hold the company accountable for what happened. This means that if your adjustable rate is increasing to an unaffordable level, you can get an extension of the low introductory rate for five years. The homeowner has time to do what they need to do. The interest rate on the mortgage would be set at the prime rate or the introductory rate, whichever is higher, after a 5-year period. They will have to pay less each month than they did before the lawsuit.
This means that Countrywide and Bank of America will help families in Ohio directly, rather than through a third party. The lender will try to make the borrower’s monthly payments no more than 34 percent of the borrower’s total income. Both Countrywide and Ohio believe that over 8,000 homeowners will be able to receive some type of assistance from the settlement program.
The Attorney General also said that approximately 4,000 borrowers who have had their homes sold in the foreclosure process will be eligible for relief payments of up to $1,500 as part of the Countrywide settlement. This money can help a family move into a new apartment or more affordable home, and funds can be used to pay for deposits, moving costs, or other housing expenses. This compensation may not seem like much to someone who lost their home, but at least the lender is providing some form of compensation to those who have been affected.
Mortgage loans will be revised to be an amount that families can afford to pay. The new mortgage offered will not exceed 34 percent of a homeowner’s total income.
To learn more about the settlement plan, call 1-800-669-6607.