BofA Settles Loan Lawsuits With $8.4B Aid to Borrowers

400,000 homeowners who borrowed from Countrywide could see relief
By Jim O'Neill,  Newser User
Posted Oct 6, 2008 9:12 AM CDT
A sign is at a Countrywide office in San Jose, Calif. is seen Wednesday, June 25, 2008.   (AP Photo/Paul Sakuma)
camera-icon View 3 more images

(Newser) – Some 400,000 borrowers with subprime and adjustable-rate mortgages from Countrywide Financial are in line to receive a share of an $8.4-billion settlement in a suit over deceptive loan practices, reports the Wall Street Journal. The deal between Bank of America, which acquired Countrywide July 1, and several state attorneys general may lower both rates and principal for some homeowners.

Bank of America says the program, which will freeze foreclosures already in process and renegotiate terms, will get under way by Dec. 1. The program also has cash assistance for already-foreclosed homeowners and those whose foreclosures can't be averted. AGs in California, Florida, and Illinois, as well as seven other states, are expected to sign the agreement, likely to become the largest predatory-lending settlement in history.