Attorney General JB Van Hollen Announces Settlement With Countrywide Financial Corporation Worth More Than $40 Million

MADISON - Wisconsin Attorney General J.B. Van Hollen announced a settlement today with Countrywide Financial Corporation, the nation's largest mortgage lender and servicer, that will provide loan modification eligibility and over $41.1 million in other economic relief for Wisconsin borrowers.

"I am pleased that this agreement means eligible borrowers in Wisconsin will be able to stay in their homes and that other relief will be brought to the State of Wisconsin,"  Van Hollen said.

Under the terms of the settlement, Countrywide has agreed to provide various forms of relief, including:

• Affordable, streamlined loan modification offers to over 2,900 eligible borrowers with subprime and pay option adjustable rate mortgage borrowers;
• More than $1.6 million in foreclosure relief benefits for Wisconsin consumers;
• Waivers of default/delinquency fees, loan modification fees and prepayment penalties.

The loans covered by the settlement are among some of the riskiest and highest defaulting loans at the center of America's foreclosure crisis.  Assuming every eligible borrower participates, this loan modification program will provide more than $40 million in savings to Wisconsin borrowers.

The settlement followed an investigation into, among other things, the marketing practices of Countrywide.  Wisconsin and other states investigating the company alleged that Countrywide misrepresented the quality and benefits of its products.

A portion of the settlement money will be used for foreclosure mitigation programs.  The office worked with the Department of Agriculture, Trade and Consumer Protection and the Department of Financial Institutions on the settlement and plans to work with funds from the settlement with agencies and other entities that have been working on issues related to the foreclosure crisis, including mitigate of the rate of foreclosures, in Wisconsin.

Homeowners eligible for loan modifications will be notified by Countrywide.  Wisconsinites eligible for foreclosure relief will also be notified.

Consumers with questions about their eligibility for Countrywide's Nationwide Homeownership Retention Program should contact Countrywide at 1-800-669-6607 or log onto www.countrywide.com for more information.

The case is being handled by Assistant Attorney General Nelle R. Rohlich.