Iowans that lost their homes after financing their mortgage through Countrywide will begin receiving information soon about how they can receive their share of a settlement with the company. Countrywide, which is now owned by Bank of America, reached a 40-state settlement over its subprime lending practices which helped drive thousands of borrowers into foreclosure.
Bob Brammer, a spokesperson for the Iowa Attorney General’s office, says 427 Iowans are eligible to file a claim for their share of the settlement. Those Iowa borrowers will split almost $400,000. If everyone that’s eligible participates, each borrower will receive just under $1,000. That’s not a lot of money for someone who’s lost their home, but Brammer says it’s hard to place full blame for foreclosures on Countrywide. "For an awful lot of people, that’s a big step in the right direction," Brammer said. "Who knows for what reasons they lost their homes…for some people, it hardly solves or resolves the situation, but it’s at least some compensation."
As part of the settlement, thousands of additional Iowans with problem loans from Countrywide are eligible for loan modifications. Brammer says Countrywide has agreed to make borrowers’ monthly payments more affordable by freezing or reducing interest rates or converting to fixed-rate loan terms.
The Iowa Attorney General’s office is receiving another $400,000 as part of the settlement. Brammer says that money will help pay for ongoing foreclosure prevention and mitigation programs, including the Iowa Mortgage Help Hotline . More information about the Countrywide settlement is available here .