New Jersey mortgage and foreclosure assistance from Countrywide
Residents of New Jersey will be receiving almost $5 million in mortgage and foreclosure help from Countrywide Financial Corp. as part of a settlement from a lawsuit that accused Countrywide of unfair practices. Half of the money received will be used to start and fund state foreclosure prevention programs to stop foreclosures in New Jersey, and the other half of the funds will go to families who lost their homes after making six or fewer mortgage payments. Almost 9,000 families will be help from these funds.
Countrywide, now owned by Bank of America has agreed to modify mortgage loans, monitor borrowers who might be in trouble and they will also be giving about $2,000 each to help people move out of homes they can no longer afford to pay the mortgages on.
New Jersey accused Countrywide of misleading sales and marketing practices, and said the company sold expensive mortgages with low teaser rates to people who could not afford them. New Jersey will use the money from the settlement for assistance programs such as those passed last year by the legislature that offer free, and sometimes compulsory, mediation efforts to help people pay their mortgage.
Homeowners are eligible for loan modification if they received certain types of subprime mortgages from Countrywide between Jan. 1, 2004, and Dec. 31, 2007. They also need to owe more than 75 percent of what their home is worth and they must also be "seriously delinquent", are at risk of being delinquent, or facing a foreclosure. Assistance provided includes :
- Homeowners will spend less than 45 percent of their household income on the mortgage's principal, interest, insurance, and property taxes.
- The funds will also be used to lower the principal for certain homeowners who owe more than 95 percent of what their home is currently worth.