Coakley, Countrywide settle

Nick Rees Mar. 24, 2010, 3:16am

BOSTON (Legal Newsline) - Massachusetts Attorney General Martha Coakley has reached a settlement with Countrywide Financial Corporation that will provide Massachusetts homeowners with an estimated $18 million in loan modifications and $3 billion in loan modifications nationwide.

Countrywide, which is now owned by Bank of America, will also make a $4.1 million payment to Massachusetts as a result of the settlement, which was filed this week in Suffolk Superior Court.

The settlement expands upon an earlier agreement reached between Countrywide and 43 other state attorneys general and the District of Columbia in 2008. That settlement provided for loan modification for certain delinquent borrowers.

This newly announced settlement builds upon standards set forth in the Home Affordable Modification Program administered by the United States Treasury.

"Over the last three years, our office has been committed to holding accountable those who are responsible for the foreclosure crisis that has ravaged Massachusetts and has led to one of our country's worst economic recessions in decades," Coakley said.

"With today's action we have secured billions of dollars in relief to help keep thousands of families in Massachusetts and across the country in their homes. This settlement provides for principal loan reductions that will help put thousands of people back on the road to financial recovery."

Under the expanded settlement, hundreds of Massachusetts homeowners are eligible for relief. Approximately $18 million of principal forgiveness is expected for Massachusetts homeowners and $3 billion for consumers nationwide.

A Mobile Customer Assistance Unit is also established under the settlement, which will be implemented by Bank of America. Bank of America will travel within New England, providing face-to-face loan modification assistance, resources and information to distressed borrowers with Country-wide originated mortgage loans.

Countrywide will also pay $4.1 million to the commonwealth, with $2.4 million of that distributed to Massachusetts Countrywide borrowers who have already lost their homes to foreclosure. The remaining $1.7 million will cover the costs of the investigation as well as costs of implementing and monitoring the settlement.

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