AG announces restitution program for foreclosure victims

Chris Rizo Feb. 16, 2009, 10:41am

Greg Abbott (R)

AUSTIN (Legal Newsline)-More than $7 million will be available to Countrywide Financial Corp residential mortgage customers in Texas, the state attorney general said this week.

The restitution funds will be available to Countrywide customers who lost their homes to foreclosure or who had fallen far behind on payments as of Oct. 6, Attorney General Greg Abbott said.

Under the terms of the settlement, eligible borrowers could get a $2,300 payment from the Calabasas, Calif.-based home lender if their first loan payment was due between Jan. 1, 2004, and Dec. 31, 2007, and they made six or fewer payments before losing their home to foreclosure.

In all, the state's 2008 agreement with Countrywide will provide $345 million in total benefits to Texas homeowners. Bank of America, which now owns Countrywide, will distribute program application forms.

"The restitution program announced today provides financial assistance to Countrywide customers who lost their homes," the Republican attorney general said.

"Last year we investigated Countrywide and reached a sweeping agreement that included loan modification opportunities for nearly 30,000 Texas homeowners. With today's announcement, we are implementing the final portion of our agreement and making restitution funds available to Texans whose homes were lost to foreclosure," Abbott said.

Countrywide Financial was accused by several state attorneys general of using predatory lending practices, including misrepresenting loan terms and borrowers' ability to afford loans.

From Legal Newsline: Reach staff reporter Chris Rizo at

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