Countrywide to Send $7.46m To Texas Borrowers
Countrywide Financial will send $7.46m in restitution to eligible Texans who lost their homes to foreclosure, according to a statement from the Texas attorney general. The restitution program, first announced by Attorney General Greg Abbott in February, disperses the funds to Countrywide's Texas customers whose loans originated between Jan. 1, 2004 and Dec. 31, 2007. In 2008, the state attorney general investigated Countrywide for encouraging borrowers to sign loans they could not afford, not disclosing risky loan terms and writing loans for unqualified borrowers, according to the release. The program was part of a $345m settlement between the attorney general’s office and Countrywide, which also provides $335m in loan modifications for 30,000 Texans. Countrywide mailed claim forms to foreclosed customers or those 120 days behind on their payments as of Oct. 6, 2008, according to the release. Only those who receive the letters will be eligible for restitution. The total amount per customer will depend on how many respond, but each claimant could receive a minimum of $1,400, according to projections. And roughly 1,400 Texans who are in or approaching default and voluntarily relinquish their residence to the Relocation Assistance Program could receive $2,000. The Relocation Assistance Program plans to send $2.8m in benefits to Texas homeowners. Write to Jon Prior.