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City Attorney Mike Aguirre called the settlement struck between 11 states’ attorneys general and Countrywide Financial Corp. “a bit of good news for the San Diegans who were victimized” by predatory lending practices of the lender, now owned by Bank of America, in a press conference this morning.
The settlement achieves much of the relief that Aguirre sought in the suit he filed in July, though the city has not directly settled its suit.
He said this morning he anticipates putting the city’s suit on hold as long as a couple of provisions are met that he said are not yet represented in the settlement. He wants to ensure Countrywide doesn’t “push through” a slew of foreclosures between now and Dec. 1, the day the settlement officially takes effect.
He also wants to demand that Countrywide exhibit some guarantee, like additional staffing, that the loan workouts afforded in the settlement are accessible for homeowners whose loans fit the criteria for the relief. (Previous promises made by Countrywide and other lenders to pursue loan workouts have proven frustrating for consumers seeking relief who wind up bogged down in answering machines and automated phone systems, only to see their house foreclosed on in the meantime.)
Jumana Bauwens, spokeswoman for Countrywide, knew no specific information about the progress of the city of San Diego’s suit.
“Obviously, this (settlement) helps the residents of San Diego as well as residents for the rest of the state,” she said.
Bauwens said Aguirre’s provisions are already met. She said the lender will not advance the foreclosure process, even before Dec. 1, for loans it believes fit the criteria for relief from the settlement. And she said that when Bank of America assumed ownership of Countrywide, the bank promised a minimum of 3,900 staff members for “home retention efforts.” Currently, there are 5,000 people on that team, Bauwens said, compared to 1,000 two years ago.
Aguirre said he will announce by Friday a list of other subprime lenders he will be targeting with similar legal action, in line with his efforts to create a “foreclosure sanctuary” in San Diego.
He said the sanctuary isn’t yet achieved, but that the Bank of America settlement sets a precedent for future relief for homeowners facing foreclosure because of loans they should never have been given in the first place.
“It’s enough to get us started,” he said. “It will be very difficult for other subprime lenders to not follow suit.”
Those lenders have not yet been contacted, he said. “There has been no formal discussion, other than we’ve announced that we’re on our way,” he said.
Aguirre said the city will continue its lawsuit against the individuals named in the suit, including Angelo Mozilo, the company’s former CEO.