Relief for Tenn. consumers facing foreclosure announced

Nick Rees Jan. 23, 2009, 12:03am

Bob Cooper (D)

NASHVILLE, Tenn. (Legal Newsline) -- Tennessee's attorney general has announced Countrywide Financial Corp., the nation's largest independent mortgage lender and servicer, has agreed to settle claims of predatory lending.

The judgment will provide an estimated 6,900 Tennessee borrowers with loan modification eligibility and provide an estimated $4 million in other economic relief to troubled borrowers in the state.

"We are pleased that this agreement can bring relief to eligible Countrywide borrowers who are on the brink of losing their homes or to some who have already lost their homes," Attorney General Bob Cooper said. "We also hope this case will be a warning to those unscrupulous lenders who would mislead consumers into committing to loans they ultimately could not afford."

Countrywide is alleged to have deceived borrowers by misrepresenting loan terms, loan payment increases and the borrower's ability to afford loans.

Countrywide, acquired by Bank of America in July, has agreed as part of the settlement to suspend foreclosures on the riskiest loans to determine if the borrowers qualify for modification and refrain from or curtail offering certain subprime loans while engaging in practices to help during the foreclosure crisis.

Countrywide has also agreed to help homeowners with an estimated $1 million relocation assistance program that will provide payments to homeowners who do not qualify for loan modification but who voluntarily surrender their homes at the time of a foreclosure sale.

In addition, Countrywide will waive prepayment penalties of up to $194,849 and up to $642,288 in default/delinquency fees for Tennessee homeowners.

The settlement will also establish a foreclosure relief fund worth an estimated $2.4 million for payments to eligible Tennessee borrowers who have already lost their homes to foreclosure.

"We are pleased that Countrywide has agreed to help so many Tennessee consumers who have been suffering in this economic crisis," Mary Clement, director of the Division of Consumer Affairs, said.

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