Countrywide Fails To Help Curb Foreclosed Homes For Sale

Countrywide Financial borrowers in Florida are complaining that the mortgage bank has not been fulfilling its promise of helping reduce the number of foreclosed homes for sale in the state as agreed upon under a settlement between the state of Florida and Countrywide.

Some are even criticizing the office of Florida Attorney General Bill McCollum for giving too much leeway to Countrywide and its acquirer Bank of America in the administration of the loan modification agreement.

Under the settlement agreement, Countrywide promised to provide $1 billion in home loan relief assistance to struggling Countrywide borrowers in Florida and help cut the number of foreclosed homes for sale across the state.

In October, the bank counted around 52,000 struggling Countrywide borrowers in the state and promised to modify their loans, particularly homeowners who took out subprime loans and pay option adjustable-rate mortgage loans.

The mortgage bank also pledged to waive all charges and penalties related to loan modifications and to provide financial relocation assistance cash to families voluntarily leaving their foreclosed homes for sale. Additionally, the bank pledged to pay borrowers whose houses were quickly turned into foreclosed homes for sale, an indication that the loans were really not affordable at the time of origination.

But the rising number of frustrated borrowers indicates that Countrywide may be turning its back on its pledge.

In response to the complaints, Bank of America spokesperson Rick Simon said the bank is struggling to handle about 80,000 calls per day despite hiring 7,400 foreclosure prevention specialists.

Based on a compliance report, Countrywide has already modified 6,497 loans in Florida since December 2008, when the settlement agreement was implemented, until the end of March.

Countrywide also said it has provided $491,963 in relocation assistance and has given $4 million to the office of the Attorney General for use in providing free legal services to troubled homeowners.

Critics of Countrywide are demanding more transparency in the implementation of the settlement agreement. They want to know whether the bank is really providing significant help to homeowners in exchange for the forgiveness of the damage it has inflicted on borrowers and the housing market.

Additionally, the advocacy group ACORN has demanded Countrywide not to use the resources of the Making Home Affordable Program to fulfill its pledge to the state of Florida to help reduce foreclosed homes for sale.