Madigan Announces Loan Modification Settlement at PUSH

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PUSH also recognizeshomeownership reliefeffortsby Lesley R. Chinn

By 2012, more than 6.5 millionpeople are predicted to face foreclosureif efforts arent put in place tomodify risky loans to help preservehomeownership, according toIllinois Atty. General Lisa Madigan.

Madigan recently was instrumentalin reaching an $8.7 million settlementwith Countrywide. Under thesettlement, which is the largestpredatory lending settlement in history,the mandatory loan modificationprogram will provide immediaterelief to homeowners who wereput into the riskiest types of loans.

At a press conference held lastFriday at PUSH, Madigan talkedabout the settlement, which wasrecently negotiated with Bank ofAmerica, which acquiredCountrywide shortly after she filedsuit in June 2008. Madigans lawsuitalleged that Countrywide engagedin unfair and deceptive conduct bymarketing and originating unnecessarilyrisky and costly mortgageloans for Illinois homeowners.

As part of this landmark agreement,Countrywide agreed to implementa range of homeowner reliefprograms and to modify its futurelending practices. These termsincluded suspending foreclosures onthe riskiest loans to determine if borrowersqualify for modification,assisting homeowners through a $1million relocation assistance program, waiving loan modificationfees and late fees, and paying $1.7million for the costs incurred inMadigans investigation.

We want to make sure that thepeople who are responsible for theseunfair and risky loans are heldaccountable, Madigan stated.Translating into nearly $185 millionin modifications, the agreement willaffect approximately 21,000 peoplein Illinois. This settlement will holdCountrywide accountable for itsconduct of putting hundreds of thousandsof homeowners into loansthey didnt understand, [could not]afford, and couldnt get out of,Madigan said.

In 2004, Southeast side residentMinnie Christmas was on the vergeof losing her home whenCountrywide increased her interestrate from 7.5 percent to 8.75 percent.They didnt have to go to 8.75percent because my credit score was600. It wasnt real good, but it wasdecent. I asked them why they wantedto go to 8.75 percent, but theydidnt answer my questions. Theirtactics were really sneaky, she said.Christmas was on the brink of foreclosureuntil she went to theNeighborhood AssistanceCorporation of America, whichintervened, on her behalf. They gotmy interest rate down to 3.0 percentand my mortgage payment from$955 to $556.90. Im still in myhouse right now. All the bad turnedout to be pretty good.

Rev. Jesse L. Jackson Sr., whoannounced a meeting with SecretaryTreasury Henry Paulson scheduledfor October 13, said the crisis onWall Street really started on the regularstreets and in rural areas ofAmerica. These are hardworkingpeople that were targeted to beexploited. This is massive thieveryand what is astonishing is that thosewho committed this are not underindictment, he said.

Also recognized was Cook CountyBoard President Todd Stroger forhelping to keep residents in theirhomes by sponsoring countywidehome foreclosure education workshopsin conjunction with theNeighborhood AssistanceCorporation of America.Stroger also called on the state legislatureto enact a statewide moratoriumon foreclosures. It is an initiativedesigned to help people stay intheir homes throughout the countyand state. Stroger said petitions arecurrently being circulated to supportthe moratorium. Another part of theinitiative includes discontinuingcounty business with unfair lendersthat refuse to provide loan modificationsfor at-risk homeowners, hesaid.

Homeowners want to work andpay but they need a loan restructuredat the present-day market value,Jackson said. That way, they canpay, stay in their homes, and keeptheir tax base and families secure,Jackson concluded.

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