How many borrowers will be covered in the Bank of America BofA Countrywide Financial deal?
It is estimated that around 390,000 borrowers will be covered in the Bank of America BofA Countrywide Financial deal.
To whom would the Bank of America BofA Countrywide Financial deal be applied?
The deal would apply to borrowers who took out subprime loans with adjustable or fixed interest rates as well as those with option adjustable-rate mortgages that are serviced by Countrywide.
The cost of the program will be split between the bank and investors who own securities that have mortgages originated by Countrywide or by third parties who sold those loans to Countrywide.
What are the terms of the Bank of America BofA Countrywide Financial deal?
Under the terms of the deal, Bank of America has agreed to, if possible, modify the terms of the loans and will first try to refinance borrowers into government-backed loans under the federal Hope for Homeowners program, which will require a cut in the principal
Are there any options available in the Bank of America BofA Countrywide Financial deal?
YES. Another option would be to lower the interest rate -- in some cases to as low as 2.5 percent -- and then raise it over time.
For borrowers with option adjustable-rate mortgages, the bank will lower loan amounts so that borrowers have as much equity, if not more, than when they took out the option ARM.
The modification program is valued at as much as $8.4 billion and the costs of the program "have already been estimated and accounted for" by Bank of America as part of its acquisition of Countrywide.
California, Florida and Illinois, where Countrywide has faced civil lawsuits, played a key role in negotiating the settlement.
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