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Countrywide Agrees to Program to Help Texas Homeowners Avoid Foreclosure

Monday, October 06, 2008 9:54 PM

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(Source: Fort Worth Star-Telegram (Fort Worth, Texas))

By Andrea Jares, Fort Worth Star-Telegram, Texas

Oct. 6--Financially troubled homeowners with Countrywide loans could avoid foreclosure and get lower mortgage payments as part of an agreement made between the lender and seven attorneys general, including Texas.

An estimated 30,000 Countrywide Financial Corp. loan holders in Texans could participate in the program, according to Texas Attorney General Greg Abbott. Countrywide is now owned by Bank of America. Countrywide loan holders who have defaulted or are likely to would be able to modify their loans, according to information released from Abbott's office Monday morning. The loan modification program's intent would be to lower monthly payments to more affordable levels. Bank of America is agreeing to stop the foreclosure proceedings for some homeowners in the new program. Borrowers in the new loan program would also be able to freeze or reduce their interest rates, change loans to fixed-rate terms, or having the principal reduced. The program would have few or no fees.

Bank of America is planning to spend $150 million across the country for this program. The program also includes up to $70 million to help homeowners who will lose their home despite the program. Those borrowers will have "soft landing" payments that will help them move into another home. The program is the result of a nearly $8 billion settlement that came after attorneys general in Texas, Arizona, Iowa, Ohio and Washington investigated Countrywide's lending practices. Attorneys general in Illinois, California and Florida had sued Countrywide. Homeowners who might be eligible for the program can call Countrywide at 1-800-669-0102, according to the Texas attorney general.

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