Some qualified Connecticut residents should be seeing a degree of restitution arriving in their mailboxes.
The economic struggles of recent years have made home ownership difficult. Devious practices by unscrupulous mortgage lenders have further exasperated the challenges. One of the biggest offenders was Countrywide Home Loans, which was at one time the largest mortgage company in the United States. They followed questionable lending practices, such as inflating a borrower’s income in order to qualify them for a larger loan than they could support or not following through on promised interest rates.
The result was that Countrywide’s practices forced thousands of homebuyers into default, often ending up in foreclosure. “Countrywide was a major subprime mortgage lender that became a poster child for the reckless home lending that contributed to a free fall in U.S. home values and the nation's most severe recession since the Great Depression.” http://www.courant.com/business/hc-countrywide-abuse-checks-0215,0,6604512.story
In August of 2008, Connecticut Attorney General Richard Blumenthal, “announced his office has sued mortgage giant Countrywide Financial Corp. and related companies for allegedly pushing consumers into deceptive, unaffordable loans and workouts, and charging homeowners in default unjustified and excessive legal fees.” http://www.ct.gov/ag/cwp/view.asp?A=2795&Q=420722
Connecticut joined California, Florida and Illinois among the states that sued Countrywide for its egregious subprime lending practices. http://www.nytimes.com/2008/08/07/business/07lend.html Washington State had a separate action pending against the mortgage giant, which included fines and a possible license revocation. In the end, a total of eleven states’ attorneys general (AGs) joined the lawsuit on behalf of their state residents. http://www.reuters.com/article/idUSBNG28749420081006
The AGs’ lawsuit began shortly after Bank of America’s (BofA) acquisition of Countrywide. While the ink was still drying on the acquisition paperwork, The New York Post reported, “Charlotte, N.C.-based BofA may rack up cumulative mortgage losses stemming from its Countrywide purchase of as much as $33 billion, according to financial analyst Paul Miller at Friedman, Billings, Ramsey & Co. That's $10 billion more than the roughly $23 billion BofA set aside to reserve against future losses in its entire mortgage portfolio.” http://www.nypost.com/p/news/business/item_iyCrRhhtjt5a6Zdzamib1I;jsessionid=723A8FD27920DE0FFF3A9BBDDAC03AB5#ixzz0fkWKahci
BofA has dropped the moniker “Countrywide”, and has rebranded its mortgage arm “Bank of America Home Loans” in an effort to distance themselves from the problems left over from Countrywide’s problems. “Under its agreement with [40] states, Bank of America also agreed to modify loan terms for qualifying Countrywide subprime borrowers.” http://kpbj.com/business_weekly/2010-02-15/countrywide_settlement_will_refinance_washington_foreclosure_prevention_e
AG Blumenthal’s office announced on Monday, February 15, 2010, that Countrywide Financial Corporation would be paying $1.27 million to 370 homeowners in Connecticut, meaning just over $3,400 per involved household. http://www.ct.gov/ag/cwp/view.asp?Q=455696&A=3869
This was part of the $8.4 billion multi-state, out of court settlement, based on the deal that had been reached in 2009. http://www.tradingmarkets.com/news/stock-alert/cfc_countrywide-sends-consumers-checks-for-abusive-and-unfair-practices-778116.html This deal was cut in response to lawsuits filed by AGs in Arizona, California, Connecticut, Florida, Illinois, Iowa, Michigan, North Carolina, Ohio, Texas and Washington.
On February 12th, the mortgage company mailed checks to Connecticut residents who qualified for remuneration. According to the story in the Hartford Courant, “To qualify for a payment, a consumer's mortgage must have been foreclosed upon or in serious default, and the first mortgage payments must have been due between Jan. 1, 2004, and Dec. 31, 2007, among other criteria.” http://www.courant.com/news/local/statewire/hc-ap-ct-countrywide-connfeb15,0,3222067.story Claims needed to have been filed by October of 2009.
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