Bank of America will aid homeowners who had mortgages from Countrywide

by Chris Knape | The Grand Rapids Press

LANSING -- More than 9,700 Michigan home buyers who got mortgages from Countrywide Financial will be eligible to refinance their mortgages under a legal settlement announced Monday.

Michigan joined several other states in settling a suit initiated in California over deceptive lending practices used by Countrywide. The giant mortgage company was purchased by Bank of America in June.

The suit accused Countrywide of using misleading marketing techniques and incentives for selling loans with risky features.

The terms of the settlement -- which may cost up to $8.8 billion nationwide -- gives some Michigan families the ability to refinance loans without fees to lower their monthly payments and, in some cases, help prevent foreclosure.

Another group of Countrywide customers who lost homes to foreclosure between 2004 and 2007 will be eligible for cash payments.

Customers who go into foreclosure after Monday's settlement may be eligible for relocation assistance.

Other terms of the settlement include require Countrywide to:

• Help fund borrower-education programs and neighborhood rehabilitation efforts in Michigan.

• End subprime and option adjustable rate mortgages (ARM) in Michigan for two years and impose new limits on low or no-documentation loans.

• Cap broker commissions at 4 percent of the amount borrowed.

• Stop automatic foreclosures until certain details about a mortgage holder's situation are verified.

• Provide quarterly reports to the attorney general on the status of troubled mortgages and what is being done to keep them from going into foreclosure.

• Maintain staff focused on helping homeowners avoid foreclosures.

Homeowners with Countrywide loans who have questions about the program may call (800) 669-6607.

People who feel they were victims of questionable lending practices may file a complaint with the state Office of Financial and Insurance Services at (877) 999-6442 or the attorney general's Consumer Protection Hotline at (877) 765-8388.

This is good news for a lot of Michigan families.

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