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					FOR IMMEDIATE RELEASE:                                                CONTACT: Andrea Seidt
October 6, 2008                                                         Deputy Chief Counsel
                                                                               614-466-3377
                                                                        aseidt@ag.state.oh.us



State AGs Reach Agreement With Countrywide Financial
 To Help Almost 400,000 Borrowers Facing Foreclosure
 Attorney General Nancy Rogers says settlement will help more than 8,000 Ohioans
                      avoid foreclosure and loss of homes.

        Attorney General Nancy Rogers today said that mortgage lender Countrywide Financial Corp.
has agreed to provide loan modifications to 397,000 borrowers nationwide - including 8,000 Ohioans -
under a settlement with Ohio and other states. Permanent relief to borrowers could equal about $7 to
$8 billion.

       The agreement was reached late Friday and announced today with Bank of America by Ohio
and several other states. The bank acquired Countrywide Financial on July 1, 2008.

        “More than 8,000 Ohioans will be offered mortgage loan modifications that will help thousands
of Ohio families avoid foreclosure and stay in their homes,” said Attorney General Nancy H. Rogers.
“The potential economic relief to borrowers in Ohio from the modification program alone is estimated
to be about $97 million. Depending on the type of loan, about one-fourth to one-half of all
Countrywide subprime loans in Ohio are delinquent.

        “For more than a year, Ohio, under the leadership of Governor Ted Strickland, Commerce
Director Kim Zurz, and my predatory lending team, has been pushing servicers such as Countrywide
for a systematic, streamlined modification program like this. My Office is hopeful that this break-
through with the nation’s largest bank, Bank of America, will help turn the tide of foreclosure in
Ohio,” the Attorney General said.

        Ohio’s lead counsel during negotiations, Deputy Chief Counsel Andrea Seidt said, “Our team
fought hard during the negotiations to formulate a comprehensive solution for Ohio borrowers and
communities. It is important that we build on the momentum of this settlement by working closely
with Bank of America on community redevelopment and by having other lenders and servicers step up
to the plate.”
        Under the agreement, eligible subprime borrowers will be able to modify the terms of their
loans to make monthly payments more affordable. Modified loan terms will vary according to the
circumstances of the borrower, but they may include an automatic freeze or reduction in interest rates,
conversion to fixed-term loans, and refinancing or reduction of the principal owed.

       First-year payments of principal, interest, taxes and insurance (PITI) will be targeted under the
modifications to equate to 34 percent of the borrower’s income (or 25 percent of income for borrowers
for whom taxes and insurance are not escrowed.)

        Countrywide said the loan modification program will be ready for implementation by
December 1, 2008, and that the company will engage in proactive outreach to eligible customers by
then. Countrywide also noted that foreclosure sales will not be initiated or advanced for borrowers
likely to qualify until Countrywide has made an affirmative decision on a borrower’s eligibility.

      The toll-free number for Countrywide subprime customers who want more information is 1-
800-669-6607. There also will be information soon at Countrywide’s web site,
www.countrywide.com.

       The settlement resolves allegations that Countrywide used unfair and deceptive tactics in its
loan-origination and servicing activities, and that borrowers often were put in structurally unfair and
unaffordable loans. Countrywide is the largest provider of subprime mortgages in the United States.

        Bank of America / Countrywide also will pay $150 million to states, nationwide, in a
Foreclosure Relief Program. Ohio is expected to receive approximately $4.5 million as its share.
Bank of America / Countrywide also will pay up to $70 million, nationwide, in payments for relocation
assistance to borrowers unable to retain their homes, and will waive up to $60 to $80 million in
prepayment penalties and default fees. The relocation assistance and fee waivers will provide Ohioans
with an additional $1.4 million in much needed relief.

        “In 2007, Ohio found itself at the heart of the nation’s foreclosure crisis,” said Attorney
General Rogers. “Today’s agreement, which provides systematic, streamlined modifications of
distressed loans, is a critical first step in stabilizing that environment. Helping hard-working families
stay in their homes has been one of Ohio’s top priorities as evidenced by the partnership between my
office, Governor Strickland, Director Zurz, Treasurer Richard Cordray, Chief Justice Moyer, the Ohio
State Bar Association, various legal services, and others. I strongly urge other servicers to undertake
comparable, aggressive programs to prevent foreclosures.”

        Rogers also urged distressed Countrywide customers in Ohio, particularly those with subprime
adjustable rate or pay option mortgages, to call the Countrywide toll-free number, 800-669-6607, for
more information, including what information they will need to assemble to determine if they qualify
for the loan modification program. The Attorney General also urged other Ohioans facing difficulty
with their mortgage payments to call Ohio’s Save The Dream Hotline at 888-404-4674 or to access the
program on the web at www.savethedream.ohio.gov.




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                                   More details and background:

                Countrywide said the loan modification program was designed to achieve affordable
and sustainable mortgage payments for borrowers who financed their homes with subprime loans or
who pay option-adjustable rate mortgages serviced by Countrywide that were originated prior to Dec.
31, 2007, and who are seriously delinquent or are likely to become seriously delinquent as a result of
loan features, such as interest rate resets or payment recasts.

       Under the settlement, which does not constitute an admission of wrongdoing, Bank of America
/ Countrywide also agreed to stop offering pay option ARMs and significantly curtail offering “low-
documentation” and “no-documentation” loans; to initiate an early identification and contact program
for people who have trouble making their payments; and to continue working with non-profits, federal
agencies, and state Attorneys General on ways to use REO (real estate owned) and other properties for
community development.

        The Bank of America / Countrywide settlement resolved investigations into Countrywide’s
lending practices by Arizona, Iowa, Ohio, Texas and Washington. The settlement also resolved
lawsuits against Countrywide initiated by Illinois, California and Florida. Other states also are
participating in the settlement.

        Rogers said she and her colleagues from Iowa, Arizona, Texas and Washington were especially
insistent and concerned about the loan modification program in extensive negotiations with Bank of
America, and making the modification programs available quickly and nationwide.

       Timing for the program is critical. Attorney General Rogers also said that a report issued last
week by the State Foreclosure Prevention Working Group concluded that industry measures to keep
homeowners out of foreclosure had slipped since the Group’s previous report in April, and that nearly
eight out of ten seriously delinquent homeowners are not on track for any loss mitigation outcome.

The group of state Attorneys General and banking departments concluded, “The mortgage industry’s
failure to develop systematic approaches to prevent foreclosures has only spurred declines in property
values and further increased expected losses on mortgage loan portfolios.”

       Rogers called systematic loan modifications to prevent foreclosures a win for all parties.

        “Foreclosures have devastated our communities and crippled our economy,” she said.
“Reversing that downward spiral, as this agreement with Countrywide / Bank of America seeks to do,
not only helps borrowers but helps businesses, communities and neighborhoods. And, it helps our
overall economy.”




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