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The Countrywide Financial (Bank of America)Homeownership Rentention Program for Countrywide customer will systematically modify troubled mortgages with up to $8.4 billion in interest rate and principal reductions for nearly 400,000 Countrywide customers nationwide. In states participating in the program, it provides up to $150 million in relief payments to borrowers who default early in their loan terms or after an interest rate reset, while committing more than $70 million to a relocation assistance program to help borrowers who are unable to retain their homes with relocation costs. Countrywide has begun proactive outreach to eligible borrowers.
The program starts December 1, 2008, and has no end date specified.
Countrywide Homeownership Rentention Division – 1-800-669-6650
Home Retention Programs
- Countrywide has not initiated or advanced foreclosures for potentially eligible borrowers during the time necessary to determine borrowers’ interest in staying in their homes and their ability to afford the new terms as well as investors’ willingness to accept loan modifications.
- Countrywide will waive late/delinquency fees for payments remaining unpaid when modifying loans and will not charge modification fees to borrowers.
- Countrywide will waive prepayment penalties in connection with any payoff or refinance on certain qualifying subprime and PayOption ARM loans owned by Bank of America/Countrywide. For loans owned by other investors, Countrywide will work with investors to encourage them to waive prepayment penalty fees.
Loan Modification Program Details
Countrywide will offer eligible borrowers an FHA refinance under the HOPE for Homeowners Program to the extent available, as well as these additional program options based on product type:
- Subprime 2-, 3-, 5-, 7- and 10-Year Hybrid ARM borrowers who become seriously delinquent following an interest rate reset will receive an unsolicited restoration of the introductory rate for five years and an invitation to contact Countrywide for additional relief if they are unable to afford the introductory rate.
Borrowers who cannot afford the introductory rate will be offered one of the following streamlined loan modifications within the limits of the Affordability Equation:
- A fully amortizing loan modification with an interest rate reduction to the introductory rate or lower for five years and an automatic conversion to a fixed rate for the remainder of the loan term. If the new payment will not be affordable at the time of conversion, the borrower will be considered for a single two-year period of reduced rate financing and the conversion to a fixed rate will occur at the end of the seventh year.
- An interest-only modification with a ten-year interest-only period at a reduced interest rate with fixed step annual rate adjustments, subject to an interest rate cap.
Pay Option ARM borrowers accepting a streamlined loan modification option will have the negative amortization feature eliminated from their loan. For owners of only one residential property who currently have little to no equity in their homes, Countrywide will write-down the principal balance to as low as 95% of the current value of the property to restore an equity position. Based on the Affordability Equation, Countrywide will offer a fully-amortizing modification consisting of:
- An optional ten-year interest-only period on the loan; and
- Reduction of the interest rate with fixed step annual rate adjustments, subject to an interest rate cap.
Other Subprime borrowers will receive a streamlined modification based on the limits of the Affordability Equation consisting of a fully amortizing loan modification with:
- An optional ten-year interest-only period on the loan; and
- Reduction of the interest rate with fixed step annual rate adjustments, subject to an interest-rate cap.
Foreclosure Relief and Relocation Assistance Programs
These additional programs are available to Countrywide borrowers in states participating in this agreement. Currently, they are available in the following states: Alaska, Arizona, California, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Iowa, Kansas, Maine, Michigan, Mississippi, Montana, Nevada, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Tennessee, Texas, Virginia, Washington and West Virginia.
Foreclosure Relief Program
Countrywide will allocate up to $150 million nationally under a foreclosure relief program to provide relief for borrowers whose loans were originated directly by Countrywide (or through brokers) between 2004 and 2007. Borrowers will be eligible for a relief payment if they made six or fewer payments over the life of the loan, occupy the underlying property, and have either experienced a foreclosure sale or are 120 days or more delinquent as of October 6, 2008. The funds will be allocated to each participating state based on the number of eligible borrowers in the state.
Relocation Assistance Program
Countrywide borrowers who experience a foreclosure sale of their property and who agree to voluntarily and appropriately leave the premises will receive a cash payment to ease their transition to a new place of residence. Countrywide anticipates paying greater than $70 million to more than 35,000 borrowers in participating states under this program.
A distressed homeowner could pursue participation in the Countrywide National Homeownership Retention Program by doing the following:
- Homeowners should first assemble ALL their mortgage documents and prepare themselves for speaking to a JP Morgan Chase counselor.
- Homeowners should then call the Countrywide (Bank of America) Hotline: 1-800-669-6650
- Countrywide counselors working with troubled homeowners may determine that the best solution for avoiding foreclosure is to refinance the homeowner into a HOPE for Homeowners loan, or they may suggest an alternative option -- it depends on your individual situation.
It is envisioned that the primary way homeowners will initially participate in this program is through the servicing lender on their existing mortgage. Servicers that do not have an underwriting component to their mortgage operations will partner with an FHA-approved lender that does.
Eligible borrowers under this program must have received a qualifying subprime mortgage or a Pay Option adjustable rate mortgage prior to 2008, and the property must be a 1-4 unit owner-occupied residential property. Additional requirements include:
- The borrower is 60 days or more delinquent and the current loan-to-value ratio is 75% or above.
- The borrower becomes seriously delinquent at any time prior to June 30, 2012, and the loan-to-value ratio at the time of the modification is 75% or above.
- The borrower is current on the mortgage but is likely to become seriously delinquent as a consequence of a rate reset or contractual payment recast based on negative amortization triggers, and the loan-to-value ratio at the time of the modification is 75% or above
If I can’t pay my mortgage, why should I call my mortgage lender/servicer?
Your mortgage lender can help you identify the options available to you, should you have trouble paying your mortgage.
When should I call my lender?
You should contact your lender as soon as you know you will have difficulty meeting your mortgage payments. You do not have to wait until your interest rate re-sets, nor do you have to wait until you are already behind in your payments. In fact, the sooner you call, the more options will be available to you. No matter what your situation is, CALL TODAY.
What if I don’t want to call my lender?
Call the Hope Now Hotline – 1-888-995-HOPE (4673). This hotline is staffed by HUD-approved credit counselors who can guide you through possible options.
What costs do I have to pay?
- Countrywide will waive late/delinquency fees for payments remaining unpaid when modifying loans and will not charge modification fees to borrowers in participating states.
- When possible, Countrywide will waive prepayment penalties in connection with any workout or refinance, whether or not the new loan is originated with Countrywide.
What documents must be provided by the borrower when discussing foreclosure alternatives with the lender?
Before we can recommend the most appropriate workout option, it is important that we have a complete understanding of your current financial situation. As part of this process, we may need you to provide certain documentation, such as tax returns, recent pay stubs, bank statements, and a hardship letter outlining the events which have caused you difficulty in maintaining your monthly payments. Additionally, please have your Chase loan number available.
What is a loan workout?
Either a loan modification or a repayment plan.
What is a loan modification?
A modification occurs any time any term of the original loan contract is permanently altered. This can involved a reduction in the interest rate, forgiveness of a portion of principal or extension of the maturity date of the loan.
What is a repayment plan?
A plan that allows the borrower to become current and catch up on missed payments that are appropriate to the borrower’s circumstances.
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