Some 11,000 Illinois homeowners who got home loans with Countrywide Financial will receive mortgage relief as a result of a settlement this week. The sub-prime lender (which was bought out by Bank of America earlier this year) agreed to $8.7 billion in mortgage payment reductions, waived late fees and penalties – to those in danger of foreclosure – and relocation compensation and reimbursement to those who have already lost their homes.
Under the settlement, mortgage rates for people with Countrywide loans could be lowered to 2.5% and after readjustment, no monthly loan payments will be higher than 32% of a borrower’s household income. The settlement calls for the nation’s first ever mandatory mortgage aid initiative and will benefit homeowners in Illinois and ten other states involved in the legal proceedings.
The bulk of the program will go towards lowering monthly payments for people struggling to cover their mortgages. Reports reveal that about $185 million of the settlement is designated to help homeowners in Illinois.