Bullock: Attorney General’s Office to Distribute $247,000 to Countrywide Foreclosure Victims

HELENA, MT – July 23, 2009 – (RealEstateRama) — Montana consumers who lost their homes through the foreclosure of some Countrywide home loans are eligible for a settlement of about $2,000 each, Attorney General Steve Bullock announced Thursday.

“Before the housing bubble burst, lenders like Countrywide talked a lot of consumers into loans they had little hope of ever paying back,” Bullock said. “While $2,000 can’t make up for losing your home, I’m hopeful that it will help the people involved through a tough financial time.”

Bullock said that his office is sending letters (PDF) to 125 Montana consumers, explaining the details of the Foreclosure Relief Program settlement (PDF) negotiated with Countrywide by the nation’s attorneys general. Only the 125 consumers notified are eligible for the settlement, which is restricted to consumers who were victims of the most deceptive lending practices and were enticed into subprime and other dubious loans.

Participation in the settlement is optional and, rather than making a claim under the settlement, consumers may instead choose to join a class action suit or hire their own attorney.

Consumer protection attorneys within the Montana Attorney General’s Office joined with their counterparts nationwide to investigate Countrywide’s mortgage origination and servicing practices.

While Countrywide admitted no wrongdoing in the settlement agreement, the attorneys general contend that Countrywide sold subprime and other types of loans to consumers for whom they were inappropriate. These Countrywide loans often trapped consumers in mortgages that carried hidden interest rate hikes or were interest-only loans, sometimes resulting in negative amortization – because the loan payments made were less than the interest charged for a given period, the amount owed actually increased over time.

In addition to the Foreclosure Relief Program for those who lost their homes, the settlement agreement also required Countrywide to assist consumers who were struggling to make their mortgage payments and in danger of foreclosure, and to provide money to relocate consumers who were displaced from their homes.

Consumers who receive the July 24 letter and have questions about the settlement should contact Rust Consulting, Inc., toll-free at 1-866-411-6987 (hearing impaired call 1-866-494-8397) or visit www.countrywidesettlementinfo.com.

CONTACT: Kevin O’Brien, 444-0582 or Judy Beck, 444-5774