Bank of America offers Countrywide borrowers some help

Posted October 6, 2008

— Facing a lawsuit over deceptive mortgage practices, Bank of America Corp. agreed Monday to pay more than $8 billion to modify hundreds of thousands of loans to keep people from losing their homes.

Charlotte-based Bank of America pledged to offer up to $8.4 billion in interest rate and principal reductions for nearly 400,000 customers of Countrywide Financial Corp., the troubled mortgage lender it acquired last summer.

Eleven states, including North Carolina, reached the agreement Friday with the bank. More than 5,000 North Carolina borrowers could see their mortgage payments reduced.

Some borrowers might qualify to pay nothing but interest for a decade. Even people who can't afford to keep their homes with such changes will be able to get help moving to a new home.

"Thousands of North Carolinians who are struggling to pay their mortgages and keep their homes will get relief thanks to this agreement," North Carolina Attorney General Roy Cooper said in a statement Monday. "Other mortgage companies need to step up to the plate with similar plans to help homeowners facing foreclosure."

Arizona, Connecticut, Florida, Iowa, Michigan, Ohio, Texas and Washington also joined in the settlement after Illinois and California sued earlier this year.

Other states could sign on, said Deborah Hagan, chief of the Illinois Attorney General's Consumer Protection Division.

Bank of America said it will launch the new mortgage aid program in December and will halt foreclosure proceedings against homeowners who are likely to qualify for the loan modifications.

In a statement, Barbara Desoer, president of Bank of America's mortgage, home equity and insurance services, called the plan "a comprehensive program that provides more solutions than ever before to assist troubled borrowers and put them back on the path to sustained home ownership."

The mortgage aid includes revising customers' payments so they don't exceed 34 percent of income. Other options include reducing interest rates and adjusting principal so that borrowers don't wind up losing equity under some payment plans.

Countrywide will not charge loan-modification fees and will waive prepayment penalties.

Illinois Attorney General Lisa Madigan said she hopes the settlement could serve as a model for other lenders to make up for misleading mortgage practices.

She stressed that the agreement involves no tax money but will help people keep their homes and keep money flowing to lenders

"This settlement will help homeowners stay in their homes, which ultimately helps investors and also helps communities," she said.

The settlement resolves allegations that Countrywide, the largest provider of subprime mortgages in the nation, used unfair and deceptive tactics in making and servicing home loans. As a result, homeowners were often stuck with unfair loans they could not afford.

Countrywide customers can call 800-669-6607 toll-free for more information or visit the company’s Web site at

North Carolinians facing foreclosure who are not Countrywide borrowers can get free help by calling the HOPE Hotline toll-free at 888-995-HOPE.

“Families are hurting and they need help,” Cooper said. “It’s in all of our interest to help homeowners find a way out of foreclosure when possible.”


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  • rc4nc Oct 7, 2008

    BOA like all banks are predatory by nature. The fact that BOA is now paying for the sins of Countrywide is sorta economic justice. I'm speaking as an ex longtime customer of BOA. When you treat customers badly they leave...

  • bs101fly Oct 6, 2008

    "hope you do not need loan anytime soon because you are not going to get it."

    you are clueless. i know several people with credit scores under 700 that got loans late last week!

    if YOU can't afford it don't whine about it, YOU played the game and signed on the dotted line!

  • not today2008 Oct 6, 2008


    No one is waiting to buy the house, that is the problem, the credit markets are locked down and no one can borrow money. I am glad all of you self righteous people on this board can make your payments on time, hope you do not need loan anytime soon because you are not going to get it. The foreclosures are not just from bad mortgages, people have lost thier jobs in banking and other industries, so if you have been unaffected great, but do not sit back and name call the people who worked just as hard as you do, until someone gave them a pink slip.

  • RocknRollDoctor Oct 6, 2008

    I guess Caveat Emptor means nothing in this economy anymore.

  • No Redneck Oct 6, 2008

    To everyone out there, have you looked at the rising un-employment rate lately? Some people have actually lost their jobs and now can't afford the payments. With the 2.7 million mfg. jobs shipped overseas in the last 8 years (mostly China, thanks WalMart!)and still counting it's only going to get worse.

  • Goalieman Oct 6, 2008

    So...what's the catch? You know BOA will not just write-off this amount of money. I bet they will try to extend the 30 yr. mortgage to 40 or 45 years to lower the payments but make their money back.

  • Mean Old Mom Oct 6, 2008

    When we purchased our home, we decided to forgo a house with a front porch and more square footage because we thought the payments might have been a bit of a stretch for us. (And we really wanted a front porch). We have refinanced several times since then and settled on an adjustable rate (with Countrywide) that had a low rate for 5 years. Even with the rate adjustments, we still will be able to make our payments because we sacrifice vacations and other things to pay more on the principal of our home. Now, if Countrywide cuts a deal with people who defaulted, I hope they will give us a front porch and a few nice vacations. We have always made our payments on time and now we will have to pay because others have been foolish. I am so sick of seeing people who do the right thing get the shaft.

  • rmgirl Oct 6, 2008

    Once again, THIS ENFURIATES ME! I did not buy more than I could afford and I am being punished. Where is the justice for the conciensious.

  • methinkthis Oct 6, 2008

    Everyone who has a mortgage processed by Countrywide during the period covered by this settlement should receive the same option. The reason this should be done is that the results of Countrywide's actions is that ALL house values have depreciated and ALL homeowners have been impacted.

  • GoBoSox Oct 6, 2008

    This is ridiculous! No one forced these people to buy a house they couldn’t afford. Did their Realtor lie to them? Maybe. Did their mortgage broker/banker lie to them? Maybe. Did the appraiser lie? Maybe. However, at the end of the day, the HOMEOWNER has no one to blame but themselves!

    Now, I’m not cold-hearted…I’m all for helping out someone who is down on their luck. Did the breadwinner lose his or her job? Was their a catastrophic illness in the family? If so, offer assistance to THESE people. But, if we’re just throwing our money (and yes, it is OUR money because this is ultimately being paid by ALL of us) into the pot for everyone who bought a house they knew they could never afford then LET THE BANKS FORECLOSE! Someone who can actually afford to make the payments is waiting to buy the house.

    This insanity has to stop. I can't reach into my own pocket because everyone else's hand is in the way!