Looks like the appropriate parties may be starting to pay for the subprime mortgage mess.

Eleven states, including those hardest hit by foreclosures, have struck an agreement with Countrywide Financial that will offer assistance to distressed homeowners, according to the
New York Times. To settle lawsuits accusing it of predatory lending practices, Countrywide will provide $8.4 billion in direct loan relief to borrowers in those states who were placed in the riskiest loans. Countrywide has also agreed to waive some late fees and prepayment penalties, and will offer help to homeowners who are already in foreclosure, which may include help moving to a rental unit.

The states involved are California, Arizona, Florida, Connecticut, Iowa, Illinois, Michigan, North Carolina, Ohio, Texas, and Washington.

Though Countrywide and other lenders have promised officials around the country that they would consider re-working loans for borrowers who became trapped in loans they couldn’t afford, lenders haven’t always followed through on those promises. In this new settlement, the loan workout program is mandatory and will be monitored by state officials.

Countrywide, the nation’s largest lender and loan servicer, was bought by Bank of America earlier this year. A BOA spokesman told the Times the company had anticipated the cost of such a program before buying the troubled lender.

Countrywide settled without admitting any wrongdoing, the Times reported.

It seems fitting that one of the companies that helped create the subprime lending/foreclosure mess has to help clean it up. What do you think of this deal? Is it appropriate? Do you think Countrywide should have acknowledged “wrongdoing” in settling this case?

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