Bank of America will begin modifying loans for customers in 11 states as a result of a lawsuit over deceptive mortgage practices. Bank of America Corp. is agreeing to pay more than $8 billion to modify hundreds of thousands of loans to keep people from losing their homes. The Charlotte NC based bank says it will modify troubled mortgages with up to $8.4 billion in interest rate and principal reductions for nearly 400,000 customers of Countrywide Financial Corp., the troubled mortgage lender it acquired last summer.

Some borrowers stuck with Countrywide might qualify for having to pay nothing but interest for a decade. Even people who can't afford to keep their homes with such changes will be able to get help moving to a new home. Illinois Attorney General Lisa Madigan's office and officials from California negotiated the settlement; Illinois and California sued Countrywide earlier this year. In California alone, the settlement will offer $3.5 billion in relief. For Illinois, that would translate to $190 million.

The 11 states that are now a part of the lawsuit include California, Illinois, Arizona, Connecticut, Florida, Iowa, Michigan, North Carolina, Ohio, Texas and Washington, more states are expected to join in. Countrywide's deceptive practices put people into loans that they couldn't afford and couldn't understand what they were getting into.


Read More Here:
http://biz.yahoo.com/ap/081006/mortgage_lawsuit.html

Original Illinois Press Release:
http://www.ag.state.il.us/pressroom/2008_06/20080625.html

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