Tuesday, October 7, 2008

Bank of America To Aid Countrywide Customers In Restructuring Mortgages

According to an article in today’s Washington Post, Bank of America could participate in the largest settlement in predatory lending history by reworking the terms of nearly 400,000 distressed mortgages to settle lawsuits pending against Countrywide Financial. Before it was hit by the subprime crisis and bought by Bank of America, Countrywide was the nation’s largest mortgage lender.

In an effort to aid homeowners, Bank of America would suspend foreclosure proceedings against Countrywide customers who qualify. These borrowers would be eligible for the restructuring of their mortgages, possibly lowering the interest or principal on their mortgages significantly.

1 comment:

David said...

According to some studies, mortgage lending is the reason why our country suffered from financial crisis and economic fall down. Mortgage lending played a big part in our current economic crisis, which has been a significant topic that is disturbing the standards and values of America. Conversely, this problem does not target the American people alone, but has navigated to other parts of the world. The International Herald Tribune explicates the worldwide credit crunch that is happening in Europe as well. Small businesses like Dominique Boudier’s printing company, outside of Paris, generally depend upon credit with its suppliers in order to maintain the functioning of the company, and her creditors are cutting back their offerings by half. This was approved by the suppliers’ credit insurance companies. Like many others, Boudier’s business needs added cash flow to make up for their major fallbacks, considering a typical 60-day lag time in which clients pay. The future of her company appears shackled without the assistance of her own bank. Her bank, like many other banks across Europe, began to put their money to sleep instead of investing it back into other banks or the economy in general. When the banks began to fall short and liquidity was disrupted, the credit began to dry up. More or less, the European Central Bank is quite similar to America’s Federal Reserve Bank. They utilize a method which is based on the ability to create as much fiat money as necessary. Fiat-money currency, which in fact is credit money, loses value once the government refuses to further guarantee its value. We see this in high inflation rates as the world’s credit crumble. People believe stronger private banking systems that make responsible decisions can solve this problem. Until then, payday advance loans will surely be manageably obtainable for consumers who need immediate short-term help and can no longer depend on a faltering central banking system.
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