A landmark settlement was reached earlier this week between Florida and Countrywide Financial Corp. The agreement establishes the country's most comprehensive mortgage-modification program, resolving allegations of predatory lending that Florida and ten other states have made against Countrywide. Those states participating in the agreement with Florida are Arizona, California, Connecticut, Illinois, Iowa, Michigan, North Carolina, Ohio, Texas, and Washington.
The agreement calls for Countrywide to provide as much as $8.7 billion in loan relief, assisting some 400,000 borrowers across the country. The program is aimed at borrowers who had secured what are termed as "the most risky loans." Those include adjustable rate mortgages (ARM) that feature what's been characterized as a teaser rate to attract buyers, whose rate then rose significantly after expiration of the teaser.
While this latest agreement between Countrywide Financial Corp. and its borrowers is a step in the right direction, it is merely a first step in attempting to rescue the economy from the mortgage crisis Tsunami. Presidential politics aside, there are miles to go before we right the mortagage mess ship. With projected foreclosure estimates in the millions, much more relief borrower relief is expected, and, according to many of our leaders in Congress, help is on the way. As they say, better late than never.
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