Local News

<< Previous   of   Next >>   ADVERTISEMENT   Loan help Loan customers of Countrywide Financial Corp. may be eligible for help if they have lost their homes because of foreclosure or are in danger of doing so. The loans involved were made before December 2007. People eligible should be contacted by the company or the state Attorney General's Office. You can also call the company at 800-669-6607 to discuss your loan. Soon, information should also be available at www.countrywide.com.   CONTACT THE HERALD Robert Frank, City Editor frank@heraldnet.com   Published: Tuesday, October 7, 2008 Does Countrywide owe you mortgage help? Some Countrywide customers may have their loans reduced or get a lower interest rate. By Mike Benbow Herald Writer In its heyday, the nation's biggest mortgage lender lied to people about what they were buying, didn't care if they could pay the loans back and gave its employees more money to sell its riskiest loans. Today, in the biggest settlement of its kind in history, Countrywide Financial Corp. has agreed to pay $8.4 billion to help customers in 11 states. That includes $200 million for customers in Washington state who have lost their homes to foreclosure or are in danger of it. Washington Attorney General Rob McKenna, who was among those who sued Countrywide, announced a settlement that is expected to help 10,000 people in the state. All were customers of Countrywide, the largest lender of subprime loans. McKenna said that customers in many cases were systematically defrauded or misinformed by the mortgage company after "they decided to grow really big." "There was a huge demand for these riskier loans on Wall Street," McKenna added. "You had a really toxic combination of Wall Street need and mortgage lender greed. It was almost a race to the bottom." The company, which was purchased by Bank of America, took a lot of customers with it on its fall. McKenna said there are three groups of people in Washington that the company will now try to help as a result of the settlement. All have a Countrywide loan that was made before December 2007. They include: People who've already lost their homes through foreclosure. They will be eligible for a payment estimated at $2,000. "They just need to sit tight," McKenna said. "They will be contacted by my office." People who will undoubtedly lose their homes because they're too deeply in debt. This is for borrowers who are at least four months behind on their payments. "If they've lost too much already or they've lost their job and can't pay their mortgage, they'll be eligible for assistance, like help getting in rental housing," McKenna said. A $70 million fund is available to help. Countrywide customers should call 800-669-6607 to discuss their loans. Soon, they will also be information at www.countrywide.com. People who are delinquent on their loans or have one of the riskiest loans. Considered risky are adjustable rate mortgages with interest rates that were low for the first few years, then reset significantly. The company has vowed to modify these risky loans to make the payments more affordable. The deals depend on the loans, but they could involve a freeze on interest rates, a reduction of interest rates, conversion to a fixed-rate loan or a reduction of the amount of principal owed. The first-year payments, McKenna said, will be targeted to allow payments of principal, interest, taxes and insurance to equal 34 percent of a borrower's income. That number falls to 24 percent for borrowers who pay their own taxes and insurance. Again, McKenna said he expects people in this category to be notified by Countrywide. But he said customers can call the toll-free number to discuss their loan with the company. He noted that it might take a while for the company to gear up for the onslaught of calls. "They're supposed to have 3,200 loan counselors available by Dec. 1," he said. McKenna said the company's loan practices were often deceptive. People who bought pay-option mortgages thought that some payments were optional, not realizing that if they didn't make them, their loan balance would increase, McKenna said. He also said the company offered "no downpayment" loans that in fact did require downpayments. READER COMMENTS Be the first to comment. You must be a registered user and verify your e-mail address to post comments to blogs or articles on HeraldNet. To register, click here. To read other terms and conditions, click here. Log out

1. Boeing warns of job cuts during 2009 2. 160 Snohomish County jobs are on the chopping block 3. Steve & Barry's store to shut down at Everett Mall 4. 'Twilight' brings out crowds after dark 5. Stillaguamish ex-leaders plead guilty to cigarette trafficking 6. Chicken pox outbreak keeps 300 Monroe students at home 7. The Wii teaches P.E. at Arlington high school 8. From a tragedy comes a promise 9. Wilson's play finally catching up to his running mouth 10. Marysville police seek robber 2 - Top 10 Stories Most Talked about 3 - Top 10 Stories Most Emailed

• Seattle Prep ends Shorecrest's title hopes • Deja vu: Seattle Christian thwarts King's title shot • Shoreline Christian's boys soccer title hopes dashed • Edmonds' Pink House staying put • King's wins first state volleyball title • RV in plain sight? City says 'That's illegal' • Timberwolves take Class 4A title • Mavs can't hang on against Capital • TV success shares life as artist, geek • Building energy independence from the ground up