Arizona Attorney General Terry Goddard has announced a multi-state settlement with Countrywide Financial Corp. regarding Countrywide's alleged use of deceptive practices in their mortgage lending business.
The settlement does not consitute an admission of wrongdoing but it can help more than 13,000 Arizonans avoid foreclosure, according to a statement released by Goddard's office.
Under the agreement, Bank of America — which acquired Countrywide in July — agreed to develop a loan modification program for up to 397,000 borrowers nationwide, providing a total economic value of what the states hope will be up to $8 billion. The company also agreed to pay $150 million to states for a foreclosure relief program for Countrywide customers and other distressed borrowers.
More than 13,000 Arizonans will qualify for the loan modification program, providing up to $245 million in economic relief, Goddard said.
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The settlement, reached Friday, resolved investigations by Arizona, Iowa, Ohio, Texas and Washington as well as lawsuits against Countrywide by Illinois, California and Florida.
The company also agreed to stop offering certain adjustable rate mortgages and significantly curtail offering "low-documentation" and "no-documentation" loans; initiate an early identification and contact program for people who have trouble making their payments; and continue working with non-profits, federal agencies and state attorneys general on ways to use real-estate-owned and other properties for community development.