Expect some good to come out of the Countrywide agreement to restructure its loans. The LVRJ reports:
Bank of America agreed to make loan modifications that would save Nevadans up to $219 million through reduced interest payments and, for some borrowers, reduced principal, according to the attorney general’s office. The agreement would reduce late fees up to $2.2 million and waive prepayment penalties up to $2.16 million.
Some mortgage loan rates would be cut to 3.5 percent, according to the attorney general.
The program is designed to help homeowners who obtained subprime or pay option-adjustable rate mortgages from Countrywide Financial Corp., which Bank of America acquired.
Reduction of principal is probably the best for the market, if not for Countrywide (now Bank of America). Reduction of interest rates will help a good deal too.
We’ll have to see how many people are really affected by this, though.