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Countrywide may pay back $1-billion to Florida homeowners

In a deal meant to stave off home foreclosures, as many as 57,000 Florida homeowners could get $1-billion in relief from Countrywide Financial.

The nation's largest mortgage lender, recently bought by Bank of America, settled "predatory lending" lawsuits with 11 states and will give back nearly $9-billion to Countrywide customers.

Attorney General Bill McCollum's office said the lender will spend the next couple of months narrowing down eligible candidates in the Tampa Bay area and elsewhere. In most cases, the lender would move homeowners from adjustable-rate mortgages into fixed-rate loans. Countrywide also will waive normal refinancing fees and penalties, and promised to halt foreclosure proceedings, at least temporarily, on eligible loans in Florida.

Florida's lawsuit alleged Countrywide put people in mortgages they couldn't afford and misled them about rates and penalties.

The settlement came as Bank of America reported its third-quarter results Monday, earlier than planned, revealing a 68 percent drop in profit. It plans to boost capital by selling stock and halving its dividend.

Like most other major financial institutions, Bank of America has been hit by significant losses in mortgages, credit cards and other souring debt.

James Thorner can be reached at thorner@sptimes.com or (813) 226-3313. Information from the Associated Press was used in this report.

>>FAST FACTS

Where to call

• Bank of America said it will launch the new mortgage-aid program in December. In the meantime, Bank of America said Countrywide customers can call toll-free 1-800-669-6607 to discuss their loans.

• The mortgage aid includes revising customers' payments so they don't exceed 34 percent of income.

Times wires

Countrywide may pay back $1-billion to Florida homeowners 10/06/08 [Last modified: Thursday, October 9, 2008 3:37pm]
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