This agreement would reduce the principal and interest rates of homeowners, providing them with more affordable terms. Those who lost their homes due to foreclosure, and could not have made those payments in the first place, also stand to receive cash payments.The determining factor for this would be early default, generally within the first 6 months of receiving the home loan.

According to the Herald, “the settlement stems from a lawsuit by Attorney General Bill McCollum alleging that the mortgage giant used deceptive marketing tactics to sell risky, high-cost loans to Florida borrowers during boom years.”

Countrywide is said to have knowingly approved loans to homeowners who couldn’t afford the payments or were unaware of hidden payments or penalty fees.

As part of the agreement, Countrywide will have to suspend foreclosures on subprime and pay-option ARMS until they determine whether or not if they meet refinancing guidelines.

The attorney general’s office estimates that 52,000 borrowers will be eligible for the refinance program. A total of $17.7 million dollars in fees will be waived, the Herald said.

Countrywide Financial is now owned by Bank of America.

Starting October 1st, the Foreclosure Rescue Fraud Prevention Act of 2008 will provide homeowner’s with an extra layer of support against “rescue” firms that have been put into place to aid homeowners with payment scheduling.

According to the Sun-Sentinel, these foreclosure rescue consultants had been taking advantage of homeowners by getting them to sign over titles and failing to compose legally binding contracts alerting homeowners of their rights. One of which is the right to dissolve a contract within in 5-days of signing with a foreclosure rescue firm.

Now with the impending law, rescue firms using such unsavory tactics will face up to $15,000 in fines for each violation.

Homeowners are also advised to attempt to contact lenders themselves, since some willingly set up payment schedules at no additional cost.

According to the Florida Office of Financial Regulation, there are several types of foreclosure rescue scams you should be aware of:

·  Foreclosure Prevention Specialist – phony foreclosure counselors.

·  Phantom Help – charges high fees for work the homeowner could do themselves.

·  Lease/Buy Back – homeowners are deceived into signing over the deed to their home.

·  False Bailout – the homeowner is lead to believe that they can rent their home from the new owners and eventually repurchase the home.

·  Bait and Switch – the homeowner thinks they are signing new mortgage documents, but are actually signing over the deed to their home.

For more information on you can avoid homeowner rescue scams read the 2008 Consumer Advisory.