Countrywide Settlement Ends Lawsuit with $8.6 Billion Price Tag

The Countrywide settlement is in, and settling the Countrywide lawsuit with the lot of state attorneys general from 11 states comes with a hefty $8.6 billion price tag attached. Reuters reports today that Bank of America, which bought the embattled mortgage lender back in July, is going to foot the rather sizeable bill.

What Does The Countrywide Settlement Mean To You?

Under the terms of the Countrywide lawsuit settlement with the attorney general offices, you may see some of that $8.6 billion if you meet certain criteria. If you hold a mortgage from Countrywide that was originated by the bank on or before 12-31-2007, falls under the sub-prime or adjustable rate umbrella, and if you are having trouble making payments, you may qualify for an interest rate and possibly even a principal reduction.

An estimated 400,000 Countrywide customers in Arizona, California, Connecticut, Florida, Illinois, Iowa, Michigan, North Carolina, Ohio, Texas and Washington are affected by this settlement. Unfortunately, as the Washington Post points out, if you are an affected homeowner who will be unable to afford any kind of home loan, you are still going to be out of luck and will proceed with a likely foreclosure.

What Does The Countrywide Lawsuit Mean To Other Homeowners In Distress?

Considering that the Countrywide settlement is a bit of a surprise in the mortgage market -- making the Ameriquest settlement over lending practices seem like small potatoes - there seems to now be an interesting precedent set for predatory lending institutions and their current owners to be held liable and become compelled to step up to the plate and help undo some of the mortgage mess they created.

This enables homeowners currently on the brink of foreclosure to quite possibly have their mortgage terms reworked and remain in their homes. Even as for a large number of already foreclosed on homeowners this measure is too little too late, it does offer hope for those currently still hanging on.

The Effect of the Countrywide Settlement on Bank of America Stockholders