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Finally, Relief for Homeowners: BofA Settles Predatory Lendi

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  • #1

    Finally, Relief for Homeowners: BofA Settles Predatory Lendi

    Finally, Relief for Homeowners: BofA Settles Predatory Lending Suit

    Posted Oct 06, 2008 12:53pm EDT by Aaron Task Related: BAC, CFC, JPM, XLF, C, WFC

    Some potential good news for homeowners is getting lost in the shuffle of the European banking crisis and the Dow's tumble below 10,000.
    This weekend, Bank of America agreed to an $8.6 billion settlement of predatory lending charges that includes the following:
    • Potential lowering of adjustable-rate mortgages to as low as 2.5%.
    • Potential lowering of the principal on some mortgages.
    • Capping mortgage payments at 34% of homeowner's income.
    As many as 390,000 homeowners who got their loans from Countrywide (which BofA acquired on July 1) are eligible for relief, which Henry Blodget fears will only delay the inevitable for many. I can't disagree, but the banking system simply cannot handle another round of foreclosures, so the "delay" scenario is better than the "total collapse" alternative.
    “Life is a system of half-truths and lies, opportunistic, convenient evasion.”
    - Langston Hughes
    Tags: None
  • #2
    MdmeX:
    Yuh di si dis?

    Monday, October 6, 2008 - 12:37 PM EDT


    Florida homeowners to get $1B under BofA settlement


    Bank of America Corp. will provide up to $8.4 billion to modify troubled mortgages it acquired as part of its purchase of Countrywide Financial Corp. in July.

    The program is part of a settlement with attorneys general in several states, including Florida, who filed lawsuits against Countrywide accusing the mortgage lender of deceptive and misleading practices that led to borrowers obtaining potentially risky and costly loans.

    BofA said the mortgage program will provide interest rate and principal reductions for nearly 400,000 Countrywide customers nationwide. It is designed to achieve affordable mortgage payments for Countrywide borrowers who financed their homes with subprime loans or pay-option, adjustable-rate mortgages before Dec. 31.

    The agreement, which is still being finalized by the participating states, could provide nearly $1 billion in total relief to Florida homeowners alone and up to $8 billion nationwide.The agreement has three components, Florida Attorney General Bill McCollum said during a press conference.

    The first part is focused on home retention. The bank will launch a loan modification program for qualifying borrowers, moving them into fixed-rate, fully amortizing loans that they can afford. The bank said first-year payments of principal, interest, taxes and insurance will be targeted to equate to 34 percent of the borrower’s income.

    About 52,000 Florida borrowers are expected to receive a loan modification under this plan, and “we expect a lot of homes will be saved because of this,” McCollum said.

    The second part is designed to provide foreclosure relief. The bank will make cash payments to eligible individual borrowers who lost their homes to foreclosure after experiencing an early payment default or after an interest rate reset, which are indications the loan was not properly written, a release from McCollum’s office said. About $150 million will be available nationwide with more than $20 million earmarked for Florida borrowers.

    The third part provides up to $4 million in Florida and $60 million nationwide for relocation assistance for borrowers in foreclosure who voluntarily agree to leave their home at the time of the foreclosure sale.
    The program is slated to launch by Dec. 1. Until then, foreclosure sales will not be initiated or advanced for borrowers likely to qualify for the modifications, said Liz Ferrer, Bank of America’s Florida president.

    Florida filed suit against Countrywide on June 30, one day before its acquisition by Charlotte, N.C.-based Bank of America (NYSE: BAC).
    The state lawsuit also named Angelo Mozilo, the former chief executive of Countrywide, as a defendant. McCollum said Mozilo remains a defendant in that suit.

    http://www.bizjournals.com/orlando/s...06/daily6.html
    "Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has."

    Comment

    • #3
      Find out whey Mozilio stash the money - those white collar PIMPS. Lynch them.

      What's the name of that one from Enron who had committed suicide again?
      “Life is a system of half-truths and lies, opportunistic, convenient evasion.”
      - Langston Hughes

      Comment

      • #4
        Originally posted by MdmeX View Post
        Find out whey Mozilio stash the money - those white collar PIMPS. Lynch them.

        What's the name of that one from Enron who had committed suicide again?

        Heard anything on a wider scale across the country?
        ...been hearing the New York banks are playing hard ball - Not accepting FHA buyers unless the property has deteriorated to rehab condition...holding out for high prices (90-100% recovery of owed balances) and in the main refusing to modify mortgage loans for those in default...racing to foreclose?

        Is that the same thing you have been hearing?
        "Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has."

        Comment

        • #5
          Haven't really ben hearing any news, but I need to

          call a cousin of mine who's in the business in NY.
          “Life is a system of half-truths and lies, opportunistic, convenient evasion.”
          - Langston Hughes

          Comment

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