Pennsylvania Attorney General Tom Corbett says that his office has reached a settlement with Countrywide Financial Corp. worth more than $150 million to obtain mortgage relief and cash assistance for thousands of Pennsylvania residents with loans through Countrywide.
Corbett's office has been investigating Countrywide for several months, and the investigation has centered on the subprime mortgages that were sold through Countrywide.
‘Thanks to this agreement, Pennsylvania homeowners will now receive direct relief that will make a real difference, helping consumers caught in the subprime lending crisis,’ Corbett says. ‘We allege that Countrywide's practices misled many Pennsylvanians and encouraged them to take out loans they did not understand and ultimately could not afford.’
More than 10,000 Pennsylvania homeowners may be eligible for loan modification, relocation assistance and mortgage foreclosure relief as part of the negotiated settlement.
The investigation found that Countrywide allegedly violated Pennsylvania's Consumer Protection Law by – among other things – misrepresenting the quality and benefits of its products and services to consumers, failing to exercise due diligence when recommending mortgage loan products and failing to clearly disclose the financing terms to consumers.
Countrywide has agreed to provide various forms of relief to consumers, including affordable, streamlined loan modification offers to more than 10,200 subprime and pay option adjustable-rate mortgage borrowers, more than $2.7 million in foreclosure relief benefits for Pennsylvania consumers, and waivers of default/delinquency fees, loan modification fees and prepayment penalties.
According to the agreement, Countrywide has made a commitment to put a freeze on its foreclosure processes until each eligible consumer has had their financial status verified.
SOURCE: Office of Attorney General Tom Corbett