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| Illinois AG Handling Some Mortgage Issues |
Attorney General Lisa Madigan's office and California officials negotiated a national $8.7 billion settlement over deceptive mortgage practices with Bank of America that will help tens of thousands of borrowers modify their risky loans.
Assistant Attorney General Susan Ellis said Monday that means about $185 million in loan modifications for Illinois.
She says the settlement's loan modification program is a model other lenders and the U.S. Treasury should look at to help homeowners.
Illinois initially sued California-based Countrywide Financial over its loans but settled with Bank of America because they acquired Countrywide this summer.
As part of the agreement, Countrywide agreed to implement a range of homeowner relief programs and to drastically modify its future lending practices. Specifically, Countrywide agreed to:
* Suspend foreclosures on the riskiest loans to determine if borrowers qualify for modification.
* Establish a Foreclosure Relief Fund of $8.5 million for borrowers in subprime and pay option ARM loans who lost their homes due to early payment default or default at the time the interest rate reset. Early payment default is a strong indication that the loan was not underwritten properly and that the homeowner couldn’t afford the loan from the beginning.
* Help homeowners through a $1 million relocation assistance program, which will provide payments to homeowners who cannot qualify for a loan modification. The funds will help borrowers relocate if necessary.
* Waive loan modification fees and late fees as well as prepayment penalties on subprime and pay option arm loans owned by Countrywide.
* Pay $1.7 million for the costs incurred in Madigan's investigation, eliminating taxpayer expense.
Homeowners who have questions about the settlement and how it may affect them can call Bank of America 800 669-6607 or Madigan's Homeowners Referral Hotline at 866 544-7151 from 8 a.m. to 8 p.m. Monday to Friday.
(Source: Illinois Radio Network) |
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| 10 06 08 by Newsroom |
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