Countrywide Financial has agreed to the largest program ever to modify home loans as part of a settlement with officials in 11 states, including California. Countrywide, the nation’s largest lender and loan servicer that was recently acquired by Bank of America, had been sued by the states over what they said were predatory lending practices.
Your Payday Loan News Source Quoted With Edits From: Lender settles mortgage lawsuit (San Diego Union-Tribune)
And the Winner Is…
Countrywide Financial Corp. King of Predatory Lenders
How would you like to own the title of the nations biggest predatory lender. This title has been given to
Countrywide Financial Corp who recently agreed to settle with officials in eleven states including California. The settlement is the largest settlement in history against a predatory lender topping $8.7 billion dollars.
Bank of America who recently acquired Countrywide Financial Corp, has been more than cooperative in the settlement and will be restructuring the loan portfolio of Countrywide. The funds from the settlement will go to help over four hundred thousand victims by reducing the principal amounts and interest rates on their existing loans. Many of the victims who are on variable rate loans will be switched over to fixed loans.
This resolution comes at a good time as the mortgage crisis sweeping the country has badly damaged the economy. Many home owners who purchased their homes at the height of the market between 2005-2006 currently owe more on their mortgage ( that a payday loan won’t cover) then their homes appraisal value.
Is There An End In Site?
Home prices aren’t expected to rebound soon, but there is some optimism that if the democratic nominee Obama becomes president the country may pull out of it’s recession a little sooner. This optimism is primarily based on the history of Wall Street’s four to six percent gains after the election of a democratic president .
Advising consumers to be frugal with there incomes at this time seems to be the most appropriate and prudent course of action but may also be counterproductive. The current economy is betting on it’s consumers to spend money as normal through out the holiday season thus keeping their bottom lines out of the red zone and from needing a payday loan.
We can only wait and see!
I feel really bad for the people who have crummy home loans, and now they owe more than their home is worth.