Countrywide will offer loan modification, relocation assistance, and mortgage foreclosure relief services to more than 10,000 Pennsylvania homeowners in what could be a $150 million settlement that ends a months-long investigation by the state attorney general’s office into whether the Bank of America subsidiary violated the state’s Consumer Protection Law.

The settlement, Attorney General Tom Corbett said, will enable eligible subprime and pay-option mortgage borrowers to avoid foreclosure by obtaining a modified and affordable loan.
Corbett said, “Thanks to this agreement, Pennsylvania homeowners will now receive direct relief that will make a real difference, helping consumers caught in the subprime lending crisis. We allege that Countrywide’s practices misled many Pennsylvanians and encouraged them to take out loans they did not understand and ultimately could not afford.”
The attorney general’s office alleges Countrywide violated the Consumer Protection Law by misrepresented its products and customer service, engaged in “bait and switch” tactics over interest rates, and mislead consumers about terms of mortgages.
Assuming every eligible borrower participates in the modification program, it will cost Countrywide more than $150 million.
Countrywide will offer streamlined loan modifications, more than $2.7 million in foreclosure relief payments and waivers of default/delinquency fees, loan modification fees and prepayment penalties. The company will also freeze foreclosure processes until consumers have had their financial status verified.