HUNTINGTON - State Attorney General Darrell McGraw and Countrywide Financial Corp. have settled a lawsuit that alleged the company issued home loans it knew its customers could not afford.
The two sides entered the agreement in federal court Tuesday. It sets up a loan modification program that McGraw says will save state consumers approximately $8.9 million, while also providing $340,901 to consumers who lost their homes to foreclosure.
McGraw alleged the company used unfair and deceptive acts to sell the loans.
"This settlement will enable West Virginia consumers who have loans with Countrywide to remain in their homes," McGraw said.
Since an 11-state settlement worth $8.68 billion in October, several states have reached agreements of their own with Countrywide, which has been purchased by Bank of America. McGraw had filed suit against the company Aug. 12 in Putnam County Circuit Court.
The loan modification program will help those eligible get their home loan interest rates reduced to as low as 2.5 percent for five years. Countrywide is waiving prepayment penalties, late fees and fees to modify the loans.
West Virginia consistently has posted one of the lowest foreclosure rates in the country during the national crisis.