$16.9 Million Shot in the Arm for Florida Homeowners
Some 2,700 Florida homeowners have recently received a collective payout of almost $17 million dollars as settlement in one of America’s biggest predatory lending cases. Countrywide Financial borrowers benefiting from this settlement will each received payouts of just over $6,000 from the lender which will, no doubt, go a long way to providing relief for these families. This is seen as one of the watershed cases in the short sale and foreclosure saga and has been hailed by many as a moral victory for beleaguered homeowners.
The relief payouts are the result of the settlement reached in a lawsuit filed against Countrywide in 2008 by Florida Attorney General Bill McCollum. The case was based on allegations that Countrywide had engaged in unfair and deceptive business practices by knowingly encouraging borrowers to take on unaffordable contractual obligations which often carried misleading penalties and rates. The case was settled in October 2008 with an agreement which included payments of foreclosure relief to those with qualifying mortgages with Countrywide.
An additional $4 million was obtained to start a foreclosure assistance program for Florida as a whole. The disbursement of this money began late in 2009 and according to McCollum’s office will continue for the next 2 years. Organizations benefiting from this program will provide eligible homeowners with free legal assistance if they can’t afford it.
This case also saw the Countrywide’s former CEO facing civil charges in the Broward County Circuit Court. The Bank of America who acquired Countrywide at the conclusion of the lawsuit was also urged by the Attorney Generals office to improve it’s response to borrowers trying to get their loans modified in foreclosure cases.
These developments have seen a nationwide move by attorneys general to file like predatory lending suits against Countrywide leading to the Bank of America pledging similar foreclosure relief to homeowners in several other states including Illinois, California and Connecticut. This comes on the back of a Countrywide payout of $7.46 million to homeowners in Texas who had already suffered or were facing foreclosure.
These developments are encouraging as it indicates a move to hold financial institutions responsible for the role they have played in the national foreclosure debacle.
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