Monday, October 06, 2008

$8.68 Billion Settlement In The Works In Countrywide Litigation With 11 State AGs; Loan Mods For Many Countrywide Borrowers On The Way

In Sacramento, California, Legal Newsline reports:

  • With news of a billion-dollar settlement between financial giant Bank of America and attorneys general from 11 states, thousands of homeowners facing foreclosures could soon have a rebirth of opportunity to save their homes. News of the settlement leaked out of several state attorneys general offices Sunday night. Those close to the negotiations hailed the progress as a significant step toward stemming the tide of the foreclosure crisis that has caused an earthquake in the county's economic foundations.

  • "This is definitely a home run," said San Diego City Attorney Mike Aguirre, one of the many city officials suing Countywide Financial Corp. over its alleged predatory lending practices. California Attorney General Jerry Brown, who led much of the negotiations with Bank of America, parent company of Countrywide, too hailed the victory of homeowners. "Unlike last week's congressional bailout," Brown said, "This loan-modification program provides real relief for borrowers at risk of losing their homes."

  • Brown said the $8.68 billion settlement, with $3.5 billion going to his state, is the largest of its kind, far surpassing the $484 million settlement with Household Financial Corp. in 2002.

For more, see Countrywide clients find new life in settlement.

See also California AG press release: Attorney General Brown Announces Landmark $8.68 Billion Settlement with Countrywide:

  • In addition to California, attorneys general in 10 states, including Arizona, Connecticut, Florida, Illinois, Iowa, Michigan, North Carolina, Ohio, Texas and Washington, are participating in the settlement. Attorney General Brown’s office, along with the Office of the Illinois Attorney General, led the negotiations for the states.


  • The settlement does not include Angelo Mozilo, the former Chairman and Chief Executive of Countrywide Financial Corporation or David Sambol, formerly the President of Countrywide Home Loans and the President and Chief Operating Officer of Countrywide Financial Corporation. Brown will continue to prosecute his case against Mozilo and Sambol.

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