Countrywide Financial agrees to modify mortgages

By TERRENCE STUTZ / The Dallas Morning News

AUSTIN – Texas and 10 other states have reached an $8.4 billion agreement with Bank of America Corp. to modify hundreds of thousands of loans – including 30,000 in Texas – and to resolve an investigation into questionable lending practices involving those mortgages.

Attorney General Greg Abbott said Monday the settlement will allow many of those homeowners to keep their homes through such measures as lowering their monthly payments, reducing interest rates and waiving late fees.

“Today’s agreement will help keep struggling homeowners out of foreclosure and in their homes,” Mr. Abbott said. “This agreement not only assists homeowners, but also helps shore up communities and markets that have been affected by the residential mortgage lending crisis.”

The investigation by several states delved into the lending practices of Countrywide Financial Corp., which was accused of misleading customers and processing hundreds of thousands of high-risk mortgages for homeowners who in many cases were unable to keep up with payments.

Countrywide was acquired last summer by Bank of America, which agreed to the settlement to close out the investigation. An estimated 400,000 former customers of Countrywide are affected by the settlement.

Bank of America has agreed to suspend the foreclosure process for eligible homeowners who are in default but wish to remain in their homes.