A total of 87 Mainers who have suffered home foreclosures are eligible for payments of $3000 or more, providing they can be located. An unknown number of additional Mainers on the brink of foreclosure may be eligible for a program that helps them keep their homes.
The payments mortgage counseling services are mandated by a 2008 agreement between the attorneys general of numerous states and Countrywide Financial Corp.
Maine’s share of the out-of-court settlement, which results from widespread charges against Countrywide alleging unfair or insufficient lending and loan servicing practices, is $430,000. In all, Countrywide is paying a total of $150 million to borrowers in 40 states who experienced a foreclosure, short sale, or deed-in-lieu of foreclosure.
Kate Simmons, a spokeswoman for Maine Attorney General Janet Mills, said the payouts to Mainers could be higher if all 87 eligible consumers can’t be located. Approximately $260,000 of Maine’s $430,000 share of the settlement will be divided among all the foreclosed-upon homeowners who can be found. The rest will be used for education and outreach to help others avoid foreclosure.
On top of the $430,000 for Maine, Countrywide is required to help loan-holders who are on the brink of foreclosure by either re-writing their loans to more affordable terms or in some cases, providing money to cover moving costs.
“We don’t know how many Mainers fall into the latter category,” said Simmons. Simmons also couldn’t say how many of the 87 homeowners have been reached because payout of the settlement is being administered by Rust Consulting, a settlement administration firm with offices in several states. A Rust project manager for the Countrywide settlement could not be reached for comment.
To be eligible for a $3000 payment, a consumer must meet the following criteria:
• The loan must have originated with Countrywide Financial Corp. with the first payment made between Jan. 1, 2004 and Dec. 31, 2007.
• The loan-holder had to live in the property at the time of the foreclosure.
• By accepting a $3000 payment, consumers waive their right for any future litigation against Countrywide.
Making a claim involves filling out a one-page form and mailing it to Rust Consulting prior to Oct. 6 of this year. Payments will begin in the first quarter of 2010. The Maine Attorney General’s Office sent letters to eligible former loan holders last month, said Simmons, but many of them have moved and proven difficult to reach. The terms of the settlement require Countrywide to make a serious attempt at finding eligible consumers.
Attorney General Mills, in a written statement prepared in response to questions from a reporter, said the recent surge in foreclosures, sub-prime mortgages, and unemployment rates has led to some “unscrupulous lending practices.”
Foreclosures in the United States increased by 81 percent this year over last and some experts predict that another 4 million foreclosure actions will have been filed by the end of this year.
“Maine consumers are advised to negotiate with their local bank when facing a debt crisis or take advantage of the new mediation program being instituted in the court system,” said Mills. “I will continue to do all that I can to educate Maine consumers about their options when faced with foreclosure.”
Consumers who think they’re eligible for a settlement or mortgage counseling services should call Rust Consulting at 1-866-411-6987 or visit www.countrywidesettlementinfo.com. The consent decree, which outlines the terms of the settlement, can be found at the attorney general’s website, www.maine.gov/ag/.