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FAQs - Countrywide

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Lawsuit FAQ's

Do I have to continue making payments on my Countrywide loan?

The filing of the Attorney General's lawsuit does not affect your legal obligations or your rights. That means the filing of the lawsuit does not by itself excuse you from making loan payments under the terms of the loan agreement. You may want to consider contacting your lender/servicer to see whether they are willing to work with you to develop a loan modification program or other agreement. However, you may wish to consult a lawyer before signing any modification or other agreement, and to obtain advice about any other rights or claims you may have.

What if my Countrywide loan is in foreclosure?

The Attorney General's lawsuit does NOT stop or undo a foreclosure. You are advised to contact a private attorney about your situation as soon as possible, or to try to work out a loan modification or other agreement with your lender.

Can you give me advice on whether I have legal claims about my Countrywide loan?

The Attorney General’s Office is not able to give you legal or other advice on this matter. If you would like advice, please consult a private attorney of your choosing, or a legal aid attorney if you qualify. The State Bar Association also has information about how to obtain a referral at its website, http://www.calbar.ca.gov. Click on the link for “Lawyer Referral Services” on the bottom left hand corner of the page. You can download the California State Bar Association’s booklet about how to find the right attorney at the following website: http://www.calbar.ca.gov/Public/Pamphlets/HiringaLawyer.aspx

What is going to happen in the lawsuit?

There is no way of knowing for certain how the court will rule in this case, or if there will be a settlement. There is also no way to know how much money, if any, will be paid to borrowers if the Attorney General prevails in this case. Also, the court might order that only borrowers whose loans meet certain criteria are entitled to money or other relief. As described above, even though the Attorney General has filed this lawsuit, the filing of the lawsuit alone does not affect your legal obligations or your rights, nor does it stop or undo a foreclosure. If you have any concerns about your individual loan, please contact an attorney for individual legal advice.

How long will the case last and can I get updates on what does happen in the status of the lawsuit?

We cannot estimate how long it will take for this case to be resolved. The Attorney General’s Office will issue press releases when there are developments in this case. Please check the office’s website, http://oag.ca.gov, for those updates.

How can I file a complaint with the Attorney General's Office about Countrywide?

Please send a letter with copies of any supporting documentation to the:

Office of the Attorney General
Public Inquiry Unit
P.O. Box 944255
Sacramento, CA 94244-2550

Or you can file a complaint on-line.

Where can I obtain more information about the Attorney General's lawsuit?

For information on the Countrywide lawsuit, please read the Attorney General's Press Release and the Complaint filed by our office. You can file this information on the Attorney General’s website, http://oag.ca.gov.


Settlement FAQ's

Which borrowers may be eligible for loan modifications?

The settlement provides for loan modifications for eligible borrowers who are 60 days or more delinquent, or become 60 days delinquent, on subprime or pay option loans that they obtained from Countrywide or from a broker working with Countrywide.

Borrowers with these loans may be eligible for modification if the first payment on their loan was due between January 1, 2004 and December 31, 2007, they live in the property that serves as security for the mortgage, they owe 75% or more of the current value of their home, and they can afford the new, lower payment under the modification.

I have a Subprime or Pay Option Loan. Does that mean I am eligible for a modification under the Settlement?

The Attorney General’s Office cannot say whether or not a particular borrower will or will not get a modification. That will depend on the borrower’s individual circumstances, including whether the borrower can afford payments on the modified loan.

What if I am delinquent on my mortgage but don’t have a Subprime or Pay Option loan?

Countrywide is pledging to evaluate all other borrowers with payment difficulties for possible modifications on a case-by-case basis. If you are having difficulties making payments on your loan but do not have a subprime or pay option loan, you should call Countrywide at (800) 669-6607.

When will the modifications start?

On or before December 1, 2008, Countrywide will begin contacting borrowers who may be eligible for modifications.

Can I contact Countrywide to ask for a modification?

Under the settlement, Countrywide will contact all borrowers who may be eligible for a modification. However, you can also call Countrywide toll-free at (800) 669-6607 to ask for a modification. If you do call Countrywide, please write down the full name of the person you talk to, and the date and time of your call.

I think I should get a modification. Do I have to continue making payments on my Countrywide loan until then?

The settlement does not by itself change your loan payment or allow you to stop making payments. Borrowers who may be considered for a modification will be contacted by Countrywide and also can contact Countrywide at (800)669-6607 with specific questions about their loan.

You should not stop making payments on your loan just because you think you might qualify for a modification. If you have the ability to pay but stop making your payments, you will likely damage your credit, and may significantly harm your chances of actually receiving a modification.

What if I am in foreclosure already?

For borrowers who may be eligible for loan modifications, Countrywide is suspending the foreclosure process, and not starting new foreclosures. Even though modifications might not start until December 1, 2008, Countrywide is suspending these foreclosures for now.

What loan terms will borrowers receive if they obtain a modification?

The exact terms of a modification will vary from borrower to borrower, depending on the borrower’s circumstances (such as loan amount, the borrower’s income, and the current value of the borrower’s home). Generally, borrowers will be considered for possible interest rate reductions or conversion to an interest-only loan for five or ten years.

Borrowers with pay option loans who own only one home might also be eligible for principal reductions if they owe more than 95% of the current value of their home.

How low could my interest rate be reduced?

Interest rates on pay option loans and subprime 2/28, 3/27, 5/25, 7/23, and 10/20 loans may temporarily be reduced to as low as 3.5%. In some cases, interest rates on other subprime loans may temporarily be reduced to as low as 2.5%.

Will I have to pay a fee to Countrywide to get a modification?

No. Borrowers eligible to get a streamlined modification under the settlement will not have to pay any fees. The only exception is that a borrower who gets a refinance through the separate federal program known as HOPE for Homeowners might have to pay a fee. However, the guidelines for the HOPE for Homeowners Program have not yet been announced by the federal government, so we do not know whether that program will include any fees.

If anyone asks you to pay a fee in order to request or receive a loan modification on your Countrywide loan, please report this immediately to the Attorney General's office by completing our online complaint form.

What about late fees and prepayment penalties?

The settlement requires Countrywide to waive late fees for borrowers with subprime or pay option loans who receive a modification, as well as prepayment penalties for borrowers with subprime or pay option loans who receive a modification or are able to refinance or pay off their loans.

What if I am current on my loan now but think I will not be able to make my payments in the future?

The agreement requires Countrywide to make loan modifications for eligible borrowers through June 30, 2012. Also, if you think you will have any difficulties making your payments in the future, you are encouraged to contact Countrywide now at (800) 669-6607.

Can I call a local Countrywide branch or my loan broker to ask for a modification?

No. At least at this time, you should not call a local branch or broker. Instead, contact Countrywide at (800)669-6607 to ask about the modification under the settlement or to ask any other questions you may have about the settlement.

Can we trust Countrywide to make all these loan modifications?

The Attorney General's office will monitor Countrywide thoughout this process. The settlement requires Countrywide to make regular reports to the Attorney General’s Office regarding which borrowers do and do not get a modification, and the reasons why.

Can I still sue Countrywide if I get a loan modification under the settlement?

Yes. Borrowers will not have to release any legal claims they may have against Countrywide in order to receive a modification of their loan.

What if I have already lost my house to foreclosure?

The settlement requires Countrywide to pay $27.9 million dollars to California consumers who have already lost their homes to foreclosure, or who were 120 days or more delinquent as of October 6, 2008. To be eligible, the borrower must have had a Countrywide loan and lived in the home that was foreclosed. The first payment on the loan must have been due between January 1, 2004 and December 31, 2007, and the borrower must have made six or fewer payments before the foreclosure. The Attorney General's office is in the process of determining which specific borrowers will be eligible for payments under this program, and the amount of those payments. We estimate that payments will be approximately $2,500 to $3,000 per borrower.

Eligible borrowers will receive a notice from the office of the Attorney General in the next few months.

Please note that to receive a cash payment under this program, borrowers will have to sign and return a release of any legal claims they may have against Countrywide regarding their mortgage loan. We urge borrowers to consult with a private attorney, or, if they qualify, a legal services attorney before signing the release. Please read below for information on finding an attorney.

What if I lose my house to foreclosure in the future?

The settlement also requires Countrywide to make relocation assistance payments to borrowers who lose their homes to foreclosure in the future. The amount of those payments may vary from borrower to borrower, depending on individual circumstances such as the size of the household.

Can you give me advice on whether I have other legal claims against Countrywide?

The Attorney General’s Office is not able to give you legal or other advice on this matter. If you would like advice, please consult a private attorney of your choosing, or a legal aid attorney if you qualify.

How can I find a lawyer?

The California State Bar Association has information about attorney referrals at its website, www.calbar.ca.gov. Click on the link for “Lawyer Referral Services” on the bottom right-hand corner of the page. You can download their booklet about how to find the right attorney at the following website: http://www.calbar.ca.gov/Public/Pamphlets/HiringaLawyer.aspx

Can I still file a complaint with the Attorney General's Office about Countrywide?

Yes. If you wish to file a complaint about your loan, or think you were denied a loan modification when you should have received one, please contact us. You can send a letter with copies of any supporting documentation to the:

Office of the Attorney General
Public Inquiry Unit
P.O. Box 944255
Sacramento, CA 94244-2550

Or you can file a complaint on-line.

Is this settlement part of the bailout passed by Congress?

No. It is a separate settlement between Countrywide and the California Attorney General.

Does the Settlement include non-California borrowers?

Countrywide is adopting the mortgage modification plan nationwide. However, the monetary relief for borrowers who have already been foreclosed is only available in states that have formally agreed to participate in the settlement. To find out if your state is participating, please contact the Attorney General's office in your state.

Where can I obtain more information about the Attorney General's settlement with Countrywide?

For more information on the Countrywide settlement, as well as the lawsuit filed by this office in June 2008, please check the Attorney General’s website, http://oag.ca.gov. The website will be updated as additional information becomes available.

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