SAN FRANCISCO (KCBS) -- Over 100,000 California homeowners should see foreclosure relief under a settlement with Countrywide Financial. The state Attorney General says this deal could be worth $3.5 billion to borrowers.
KCBS’ Holly Quan Reports
Under the multi-state settlement, people who got loans with Countrywide before the end of last year will be eligible for loan restructuring, which could mean a lowered interest rate and payments, but only if they were in a sub-prime or pay option mortgage.
"Those who have been ripped off, who have been put in mortgages that are so complicated that they couldn't understand them, much less afford to make the payments will be in a position to stay in their own homes and continue paying," said Attorney General Jerry Brown.
Deputy Attorney General for Consumer Affairs Kate Sears says borrowers will get warning letters 90 days before their rates adjust, telling them to call if they think they'll have problems.
"They will reach out to the sub-prime and the pay-option arm borrowers to let them know that if the borrower anticipates having difficulty affording the payment once it increases with the reset, that they should contact Countrywide to discuss their situation," said Sears.
Bank of America, the new owners of Countrywide says it will not move forward on foreclosing on any borrower who may qualify for the new program. (MGO)
