- The Washington Times - Thursday, April 2, 2009

TRENTON, N.J. (AP) - New Jersey will receive about $3.7 million from Countrywide Financial Corp. for a fund to help eligible homeowners and state programs as part of a nationwide settlement to resolve subprime mortgage complaints, the state said Thursday.

The state had alleged that Countrywide put borrowers in risky and eventually unaffordable sub-prime mortgages. In completing the settlement, Countrywide admitted to no wrongdoing.

Countrywide will create a foreclosure relief fund for New Jersey borrowers and state mortgage foreclosure mitigation programs. The state will receive half of the money to fund mortgage modification programs. The remaining half will be available to sub-prime borrowers who lost their homes to foreclosure after making six or less payments.

The state estimates 8,200 New Jersey residents will benefit from the agreement.

The $3.7 million is part of a $150 million nationwide settlement.

In addition, Countrywide has agreed to offer loan modifications to mortgage borrowers and to not begin foreclosure proceedings until determining whether a borrower is interested in staying in his or her home and whether the borrowers loan can be modified.

California-based Countrywide, once the nation’s largest mortgage lender, was among the companies whose risky lending habits led to the nation’s financial meltdown. Since the collapse of the subprime mortgage market last summer, Countrywide has been hit with lawsuits by investors, consumers, and multiple state and federal officials.

Thirty states have signed agreements with Bank of America Corp., which acquired Countrywide last year and announced in October that it would pay more than $8 billion for interest rate and principal reductions for nearly 400,000 customers nationwide.

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