ASSISTANCE FOR COUNTRYWIDE HOME LOANS BORROWERS
Do you have a friend or family member that is having diffiulty making the payments on a mortgage with Countrywide Home Loans? If so, they should be advised that assistance may be available. The following is a memo that was provided by Melinda Zuppo at the Countrywide office in Gaithersburg, MD.
Financially troubled borrowers should always contact their lender to disucss available options. Unfortunately, a high percentage of delinquent borrowers never make that contact.
Bank of America announces homeownership retention program
Mon 6 Oct 2008
Bank of America has announced the creation of a proactive home retention program that will systematically modify troubled mortgages with up to $8.4 billion in interest rate and principal reductions for nearly 400,000 Countrywide Financial Corporation customers nationwide.
The program was developed together with state attorneys general and is designed to achieve affordable and sustainable mortgage payments for borrowers who financed their homes with subprime loans or pay option adjustable rate mortgages serviced by Countrywide and originated prior to Dec. 31, 2007. Bank of America acquired Countrywide July 1, 2008.
"We are confident that together with the attorneys general we have developed a comprehensive program that provides more solutions than ever before to assist troubled borrowers and put them back on the path to sustained home ownership," said Barbara Desoer, president, Mortgage, Home Equity & Insurance Services. "Since acquiring Countrywide in July, we have committed significant resources and developed innovative programs to help as many Countrywide customers as possible stay in their homes."
Countrywide mortgage servicing personnel will be equipped to serve eligible borrowers with new program elements by Dec. 1, 2008 and will then begin proactive outreach to eligible customers. Foreclosure sales will not be initiated or advanced for borrowers likely to qualify until Countrywide has made an affirmative decision on the borrower's eligibility.
The centerpiece of the program is a proactive loan modification process to provide relief to eligible borrowers who are seriously delinquent or are likely to become seriously delinquent as a result of loan features, such as rate resets or payment recasts.
Various options will be considered for eligible customers to ensure modifications are affordable and sustainable. First-year payments of principal, interest, taxes and insurance will be targeted to equate to 34% of the borrower's income. Modified loans feature limited step-rate interest rate adjustments to ensure annual principal and interest payments increase at levels with minimal risk of payment shock. Modification options include:
- Federal Housing Administration refinancing under the HOPE for Homeowners Program
- Interest rate reductions , which may be granted automatically through streamlined processing
- Principal reductions on Pay Option adjustable rate mortgages that restore lost equity for certain borrowers
The program applies to eligible mortgage loan customers serviced by Countrywide and who occupy the home as their primary residence. Under the national program, Countrywide will not charge eligible borrowers loan modification fees, and Countrywide will waive prepayment penalties for subprime and pay option ARM loans that it or its affiliates own. Some loan modifications will be subject to compliance with servicing contracts and some will require investor approval.
"Now more than ever homeowners and home buyers are looking to Bank of America as the lender they trust and as a leader that can renew America's confidence in home ownership," said Desoer. "Combined with our strong track record in responsible lending and previously announced lending practices commitments, this bold new program makes it clear that Bank of America is committed to be the leader in responsible mortgage lending practices."
As part of agreements to resolve outstanding claims against Countrywide by certain states, borrowers in participating states will additionally be eligible to access their share of:
- A Foreclosure Relief Program of $150 million on a nationwide basis for payment to eligible Countrywide servicing customers who suffered foreclosure or are currently at serious risk of foreclosure having made only minimal payments since the time their mortgages were originated by Countrywide
- An additional program, projected to make payments up to $70 million to support customers with loans serviced by Countrywide who face imminent foreclosure, providing financial assistance with their transition from home ownership
As part of the state agreements, Countrywide is further committing to eligible borrowers in participating states, it will waive late fees associated with a borrower's default in finalizing modifications under the program.
In addition, states that have not yet become participants in this program will be provided an opportunity to do so, which would enable their residents who are eligible Countrywide borrowers to become eligible for these benefits.
"Our program represents principal and interest reductions over time to borrowers on loans Countrywide owns and on loans Countrywide services on behalf of investors," said Joe Price, chief financial officer. "By taking projected foreclosure losses and instead directing those funds into these proactive foreclosure prevention efforts, we create a solution in the best interests of both our customers and the investors whose loans and securities we service. Of the eligible loans, about 12% are now held by Bank of America. The cost of restructuring these loans is within the range of losses we estimated when we acquired Countrywide."
Associate questions and answers
What are you announcing today?
Bank of America is creating a home retention program to systematically modify troubled mortgages with interest rate and principal reductions potentially totaling nearly $8.4 billion for up to 400,000 Countrywide Financial Corporation customers across the country. Beyond the national program, participating states will have access to a $150 million foreclosure relief program and a $70 million relocation program.
What does the loan modification program do and whom does it affect?
Our loan modification program will provide permanent payment relief to nearly 400,000 Countrywide customers across the country who financed their primary residence with a Pay Option adjustable rate mortgage (ARM) or any form of subprime first mortgage, whether fixed or an ARM.
When does the loan modification program take effect?
Countrywide mortgage servicing personnel will be equipped to serve eligible borrowers under the new loan modification program by Dec. 1, 2008 and will then begin proactive outreach to eligible customers. Foreclosure sales will not be initiated or advanced for borrowers likely to qualify until Countrywide has made an affirmative decision on the borrower's eligibility.
Do these programs apply to Bank of America borrowers?
No. These programs have been created in coordination with the state Attorneys General and satisfy their claims about Countrywide. Bank of America has home retention programs in place for all of its customers who may have difficulty making mortgage payments. Interested Bank of America customers are encouraged to call the bank at 800.846.2222 to see if they may qualify for these programs.
Does this program change the types of loans Countrywide and Bank of America have already announced they would curtail?
No. This program is in addition to announcements Bank of America made this summer, which are in keeping with the bank's established policies and responsible lending practices:
- Countrywide will refrain from offering: subprime loans; high-cost mortgage products; nontraditional forward mortgages with negative amortization features.
- Countrywide also will curtail low-documentation and no-documentation loans.
- Countrywide will place limits on broker compensation.
Wasn't Countrywide already involved in home retention efforts?
This program expands earlier initiatives, including aggressive outreach and foreclosure mitigation activities to help distressed borrowers stay in their homes.
In the first eight months of this year, Countrywide completed home retention workout programs with more than 169,000 borrowers - 52,000 in July and August and alone. About 5,000 home retention specialists are currently dedicated to this effort.
What was Bank of America's role in this announcement?
Bank of America has been proactive in the development of the program and solutions provided in this announcement with the attorneys general. We have met intensively over several months to discuss what more can be done to help Countrywide borrowers. Both sides in these discussions have properly focused on providing home retention solutions for troubled homeowners.
What do I do if I receive a call from the media asking about the program?
Any calls from the media that associates receive should be referred to Countrywide's Media Hotline at 1.800.796.8448 or pressroom@countrywide.com.
Where can a customer find out more information about the program?
If you are contacted by customers for assistance, please refer them to 800.669.6607.
Melinda Zuppo
Production Assistant to
Jim Beatty - AVP
Countrywide Bank, FSB
301-519-8160 ext. 8348 6 Montgomery Village Ave #101
Gaithersburg, MD 20879
http://beattyloans.com
Melinda_Zuppo@countrywide.com
We represent home buyers and sellers as their exclusive agents in the Maryland suburbs of Washington DC and nearby counties. Your Real Estate Professionals In Maryland.
Roy Kelley
Roy Kelley & Associates
Associate Broker, RE/MAX Realty Group
Client Assistance: 301-670-8996
Recipient of the RE/MAX International Lifetime Achievement Award - 2008
I would like to share my experience with Countrywide (now Bank of America's) Home Retention Program. In November 2008, I provided financial information to Countrywide which resulted in their sending me, in Feb 2009, paperwork offering me new loan terms, reducing my mortgage interest rate by 1% and lowering my monthly payment. The papers were notorized and returned to them in 2 days. The loan terms were to be effective April 1, 2009. It is mid-June and 2 weeks ago a representative in their Home Retention Dept. told me no one was ever assigned to reduce the payment amount of my mortgage, so she was now "escalating" this. (I've still been paying the higher amount since I am still getting billed each month for the higher, old amount). Today I made probably call 15 to them again. Now they are saying the papers they previously acknowledged receiving were never received and the request was going to be closed out. Of course no one told me that story until today. Now they are saying they are going to review the request again and that I might not get my loan reduced after all. Some of their internal notes say they don't have the papers, some say they do. This company goes back on their work, provides poor service and basically does not care. We should probably start writing Obama about this type of thing. The government's thinking the banks are trying to help homeowners. Well, just look at what the outcomes experienced are.
It would be interesting to know your final outcome Sue. It's now September 2010 and a definitive decision has not yet been made after over a year of trying to comply.