Good news for distressed Illinois homeowners with Countrywide mortgage loans!

Finally, some good news for the thousands of people who are being foreclosed and losing their homes: Countrywide (now part of Bank of America) recently entered into an $8.4 billion settlement with 11 states, including Illinois. Illinois’ share of this settlement amounts to $190 million, and these funds will be used to assist approximately 21,000 distressed Illinois homeowners who obtained loans from Countrywide Mortgage prior to December 31, 2007.

Specifically, these homeowners can expect to have their interest rates reduced; in some cases, even the principal of the loan may be reduced. The goal is to make their monthly payments more affordable, ideally 32% or less of a family’s income. Additionally late fees, loan modification fees, and prepayment penalties will be waived. Certain families that already lost their homes as a result of foreclosure proceedings shall receive cash payments. Countrywide/Bank of America will also suspend ongoing foreclosure proceedings for those homeowners who qualify for assistance as a result of the settlement.

To see if you qualify, call the bank at 800-669-6607; make sure you have all of your loan information handy when you call. You can also call the hotline set up by the attorney general’s office, at 866-544-7151.