Countrywide Mortgages, now owned by Bank of America Corp. has agreed to the largest program ever to modify home loans in response to a potential lawsuit over deceptive lending practices.
Countrywide will modify troubled mortgages with up to $8.4 billion in interest rate and principal reductions for almost 400,000 customers.
The settlement should help about 8,000 Ohioans. About one-fourth to one-half of all Countrywide subprime loans in the Ohio are delinquent according to Ohio Attorney General Nancy Rogers ."Foreclosures have devastated our communities and crippled our economy," she said.
Borrowers whose first payment was due between Jan. 1, 2004, and Dec. 31, 2007, can participate in the settlement. Their loan balance must be at least 75 percent of the current value of the home, and the borrower must be able to afford the adjusted monthly payments.
The mortage aid program is set to begin in December. Some borrowers stuck with Countrywide mortgages could qualify for having to pay nothing but interest for a decade.
The program will focus on borrowers who were placed in the riskiest loans, including adjustable-rate mortgages whose interest rates reset significantly higher several years after the loans were made.