Pennsylvania AG Reaches Settlement with Countrywide

Pennsylvania Attorney General Tom Corbett announced Wednesday that the Attorney General’s Office has reached a more than $150 million settlement with Countrywide Financial Corp. Corbett said his office has been investigating Countrywide for several months over alleged predatory lending practices surrounding subprime mortgages. The investigation found that Countrywide allegedly violated Pennsylvania’s Consumer Protection Law. Corbett is just one of many AGs to jump on the bandwagon looking for their piece of the pie in the nationwide Countrywide settlement. Under the settlement, Countrywide and its affiliates agree to modify loans for eligible borrowers — those who received either a qualifying subprime adjustable rate mortgage or a Pay Option adjustable rate mortgage prior to Dec. 31, 2007 and who meet other specific requirements — in an effort to keep people in their homes. Depending on the loan type, modifications may include an automatic freeze or reduction in interest rates, conversion to fixed-rate loans, or refinancing or reduction of the principal owed. “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 said. More than 10,000 Pennsylvania homeowners may be eligible for loan modification, relocation assistance and mortgage foreclosure relief as part of the negotiated settlement, according to Corbett’s office. Assuming every eligible borrower participates, this loan modification program will provide more than $150 million in savings to Pennsylvania borrowers. Write to Kelly Curran at Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.

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