After participating in alleged unethical lending practices, one of the country’s largest lenders, Countrywide, became infamous. Some of Countrywide’s complaints were due to poor internal communication, which meant borrowers heard a different story every time they talked to a different customer service representative. As a result, complaints about Countrywide’s errors and stories about spreading untruths have become commonplace and spread quickly.
In July 2008, Bank of America took control of Countrywide. Then in October they announced a plan to help fix past mistakes, particularly those done to homeowners. The long and the short of it is that Bank of America wants to help homeowners meet their mortgage obligations and subsequently keep their homes.
After a lawsuit was filed against Countrywide, a statement was released, both by the company and by Bank of America, outlining plans to help homeowners who were struggling to pay their mortgages through consistent home loan modification practices. While Countrywide customers have heard of this plan, most do not understand how things have changed or how they can take advantage of these changes.
When the monthly payments were too high, the new plan sets the debt to income ratio at 34%. After the loan is modified, a step-rate program is put in place to slowly lower the interest rate until the mortgage is reduced to an amount that is manageable. This is only available to homeowners who are living in the house they own.
There are some options available for those interested in Countrywide’s new plan. Under the FHA loan-refinancing program, HOPE for Homeowners, borrowers who were not eligible for refinancing previously, have new ways to approach a loan modification. It was after so many people lost their homes, or lost home equity, in the recent real estate crash, that HOPE was conceived. The condition is that you have to sell your home and give FHA a portion of any accrued equity. If you do not qualify for HOPE, there are other loan modification processes you can access, initiated by Countrywide, including reducing interest rates and principal forbearance.
If you are having trouble paying your Countrywide mortgage, you definitely should investigate their loan modification program. Bank of America has made the situation at Countrywide better due to its 2008 news release. There is a way to help homeowners renegotiate their present loans, and you won’t know if you qualify for them if you don’t apply. Countrywide is also currently reviewing its mortgages and sending letters to borrowers who are two months behind in their payments and in danger of losing their homes.
The only way you can know if a Countrywide home loan modification will help you is if you contact Bank of America or Countrywide to get the information.