Countrywide Refinance May Help Some Homeowners

Real Estate Agent with DLP Realty


house, picket, fence, yellow doorIf your mortgage is with Countrywide, a window of opportunity to refinance your loan was opened on October 6, when the company agreed to change the terms of loans for homeowners trapped in mortgages they can't afford.  As part of an $8.7 billion predatory lending settlement announced by California Attorney General Jerry Brown, up to 400,000 mortgages made before December 31, 2007 could be affected.

Countrywide, once a leader in subprime, adjustable-rate, and other risky loans, was sued by the State of California, Florida, and Texas, for deceptively marketing risky loans with low teaser rates to attract buyers who didn't understand what their payments would be when the starter rate expired.  The States of Arizona, Ohio, Iowa, Michigan, Washington, and North Carolina joined the suit.  It is expected that borrowers in all states will reap the benefits of the settlement even if their states do no not join.

What borrowers can expect is that Countrywide will change terms of loans in a variety of ways that will decrease the payments for most buyers.  Ways this might be done include maintaining teaser rates for five years or dropping the interest rate to as low as 3.5%, converting loans to fixed rate loans with interest as low as 2.5%, or reducing the interest on fixed rate loans to interest as low as 2.5%.  If possible, Countrywide will attempt to have the loans backed by FHA through Hope for Homeowners. For loans that now exceed the value of the home, Countrywide is willing to rewrite the loan amounts. In addition, Countrywide will waive late charges and loan modification fees.

The goal is to keep homeowners in their homes and to compensate those whose loan terms cannot be worked out so that the new mortgage is no more than 35% of their income.

Before this settlement, Countrywide had begun to work with homeowners to work out loan refinancing arrangements and even had some loan buy back programs in place before it fell on hard times in 2007.  Countrywide was bought out by Bank of America in January, 2008 and assumed its loan portfolio. - and lawsuits.  The recent settlement does not contain an admission of liability but is the first time a lender has agreed to make mandatory loan modifications.

Countrywide expects to be ready to start processing the loan modifications by December 1, but those homeowners in eminent danger of foreclosure or in foreclosure should contact the bank immediately at (800) 669-6607.

Bank of America is expected to operate its mortgage division under the Countrywide name until at least 2009.  Neither B of A nor Countrywide is expected to reenter the subprime mortgage market.


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Sue Pirrone
Pirrones Graphic Designs - Fredericksburg, VA

This is great news...does this apply to all states, or just the states that were party in the law suit

Nov 09, 2008 11:19 PM #1
Charlie Ragonesi - Big Canoe, GA
Homes - Big Canoe, Jasper, North Georgia Pros

Good post and good information to have. I wonder what this will do to their short sales? I have a couple working now

Nov 09, 2008 11:31 PM #2
Dean Moss
Dean's Team - Keller Williams Realty Partners Chicago IL - Chicago, IL
Dean's Team Chicago IL Real Estate Team

Don -

Same program here in IL.  The IL Department of Financial and Professional Regulation also wanted to stop any NEW Countrywide loans, but was unsuccessful in doing so since the actual bank where the money comes from is out of state.

Let me know how this program works in PA.


Nov 09, 2008 11:33 PM #3
Debbie Salmon
keller williams - Vancouver, WA

Good post and good information to have i love the article

Jan 01, 2009 01:53 AM #4
T Ward

Will this be available for Homeowners in Wisconsin that have the same type of mortgage problems with Country Wide?

Mar 05, 2009 02:17 PM #5
Don Wenner
DLP Realty - Allentown, PA

This post was written a few month ago, but here is some current information for you. Countrywide has agreed to provide mortgage loan modifications and also over $41 million in other economic aid for Wisconsin borrowers. Under the terms of this settlement agreement reached 2/19/09 between Wisconsin and Countrywide, Countrywide has agreed to provide various forms of mortgage relief, including:

  • Waivers of loan modification fees, default/delinquency fees, and they will not charge prepayment penalties
  • An affordable, streamlined loan modification process that will help almost 3,000 eligible home borrowers with both pay option and subprime loans
  • An additional $1.6 million in foreclosure relief benefits for Wisconsin consumers

To find out if you qualify, call (800) 669-6607 or go to

Mar 06, 2009 08:58 AM #6
Joseph James

Does this apply to countrywide customers in California?

Apr 24, 2009 04:33 PM #7
Don Wenner
DLP Realty - Allentown, PA

California was one of the first states to offer terms to customers as they were named in the lawsuit.  For specific terms, call (800) 669-6607 or go to


Apr 25, 2009 02:49 PM #8
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