Countrywide Mortgage Loans to Be Restructured
Both ABAJournal.com, in a story by Debra Cassens Weiss (“Bank of America to Modify Countrywide Mortgages in $8.6B Deal”), and Law.com, in a story by Christopher Wills (Bank of America Settles Suits Over Bad Mortgages”), carried the news that Bank of America has agreed to modify mortgage loans written by the former mortgage lender, Countrywide. Bank of America had acquired the Countrywide loan portfolio and, thereby, also acquired the task of defending the suites brought by various Attorneys General against Countrywide. According to Law.com, Connecticut is among the states participating in the settlement that will end these particular lawsuits.
According to ABAjournal.com, the loan modifications may include the following:
Bank of America will modify loan terms for homeowners who are seriously delinquent in their mortgages or likely to become unable to make their payments. The program would reduce principal owed for some loans and reduce interest rates for others. The program would cut mortgage payments to no more than 34 percent of borrowers’ income.
We are in no position to evaluate the particulars and judge the adequacy of the relief obtained through this settlement. But, it does seem to be far better to settle the lawsuits and get some relief flowing to the borrowers rather than extend the lawsuits. At the same time, Bank of America can focus on setting an appropriate future course for its mortgage business.
