PA Repo Homes Program Enhanced With Countrywide Settlement

The programs of Pennsylvania to contain repo homes have been rejuvenated to a great extent with the allocation of $2.7 million to homeowners from the state’s settlement with mortgage lender Countrywide Financial Corporation.

According to Pennsylvania Attorney General Tom Corbett, over 1,100 distressed borrowers in Pennsylvania are eligible to receive their share in the Countrywide settlement. He said his office has sent the notifications to the eligible borrowers, including instructions, claim forms and other papers related to Pennsylvania’s settlement with Countrywide.

All loan borrowers eligible under the settlement have had their mortgage loans foreclosed by Countrywide. Each eligible borrower is expected to receive at least $2,388 from the settlement.

Pennsylvania’s settlement with Countrywide included also better terms for Countrywide mortgage borrowers in danger of seeing their houses become repossessed homes.

Under the settlement agreement, Countrywide also signed to modify over 10,200 subprime loans and pay option flexible rate mortgage home loans and cut down monthly payments to affordable levels. Countrywide borrowers qualified under this agreement are those who took out risky loans before the end of December in 2007.

Reduction of monthly loan payments would be accomplished by reducing interest rates, reducing the principal balance or converting the adjustable-rate structure to fixed-rate.

The bank will also waive delinquency and default fees, prepayment penalties and loan modification charges.

Countrywide has also agreed to stop all scheduled foreclosure actions and examine all the cases of borrowers and ensure that all eligible homeowners are given the chance to keep their houses from becoming repo homes.

Based on estimates, Pennsylvania consumers have the potential of making over $150 million in total savings if Countrywide borrowers are able to keep their houses from lists of repo homes.

State Attorney General Corbett advised homeowners to call Countrywide’s hotline for further information about the settlement and about various foreclosure prevention programs available.

Meanwhile, Pennsylvania residents who have concerns about mortgage servicers, foreclosure prevention companies and consumer services are advised to call the consumer protection hotline of the Attorney General’s Office or submit their complaints online at attorneygeneral.gov.

Pennsylvania’s settlement agreement with Countrywide Financial Corporation stemmed from the mortgage bank’s alleged violation of the provisions of the state Consumer Protection Law, including misrepresentation in its home loan advertising, failure to implement standard underwriting policies and omission of information related to higher interest rates and additional charges.

All in all, Attorney General Corbett said Countrywide misled many borrowers in Pennsylvania to take out risky loans and contributed to record numbers of repo homes across the state.

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