Countrywide borrowers to get foreclosure relief

CHARLOTTE, N.C. -- Relief is on the way -- this time not for Wall Street, but from Wall Street for struggling homeowners.

Mortgage lender Countrywide Financial Corporation, under Bank of America’s umbrella, has agreed to provide approximately $8 billion in home loan and foreclosure relief to nearly 400,000 homeowners. Attorney General Roy Cooper says that includes more than 5,000 in North Carolina.

That money is part of a deal with 11 states who’d charged that Countrywide — acquired by Bank of America in July — used unfair tactics when it gave out hundreds of adjustable rate loans. The company provided more subprime mortgages than another other lender in America.

The relief comes in the form of modified loans for eligible borrowers. It may mean frozen rates, or fixed rates, or even a reduction of the principal owed. Countrywide will try to make sure first-year payments of principal, interest, taxes and insurance won’t total more than a one-third of a borrower’s income.

"Thousands of North Carolinians who are struggling to pay their mortgages and keep their homes will get relief thanks to this agreement," Cooper said. "Other mortgage companies need to step up to the plate with similar plans to help homeowners facing foreclosure."

Countrywide officially begins the program Dec. 1, but it has already started working with homeowners.

NACA, or National Assistance Corporation of America, works with Countrywide borrowers to readjust their rates today.

"They’ve stepped up to the plate, especially after Bank of America acquired them," Home Save counselor Wayn Brown said. "I am glad to see what Countrywide is doing, hoping everybody else will follow suit."

Brown and his fellow counselors speak directly with Countrywide to work out those new mortgages.

Ray Hood of East Charlotte was just beginning the process Monday. His payments for a 3-year-old condo have doubled from a one-time low of $600 per month. Leaner paychecks from work made that new mortgage rate impossible.

"Everything went the wrong directions," Hood said.

With NACA’s help, he was feeling optimistic about getting lower rates for the first time in a long time.

"These counselors -- they’ve helped a lot of people, so they can help in these uncharted waters for first-time buyers like myself," Hood said.

To contact NACA, call toll-free 1-888-302-NACA.

The Countrywide/BofA deal also includes prevention provisions. Countrywide has also agreed to stop making problematic high-cost mortgages and payment option adjustable rate mortgages. The companies will also pay $150 million to the 11 participating states for their work helping folks who have already lost their homes to foreclosure.

Bank of America and Countrywide will also pay up to $70 million for relocation assistance to borrowers unable to stay in their homes, and will waive up to $60-$80 million in prepayment penalties and default fees.