Distressed homeowners in 11 states, including Illinois, may avoid foreclosure due to a settlement reached between Bank of America, which recently acquired Countrywide Financial Corp., and the attorneys general of those states.

The plan involves a voluntary reduction by BOA/Countrywide of up to $8.4 billion in interest rate and principal reductions for nearly 400,000 customers.

We applaud Illinois Attorney General Lisa Madigan and her counterparts in Michigan, California, Arizona, Connecticut, Florida, Iowa, North Carolina, Ohio, Texas and Washington for their persistence in this matter, and BOA for doing the right thing.

As legal counsel for more than 25 individuals who were victims of mortgage fraud involving more than $50 million in properties in Chicago and its suburbs, we have seen first-hand the devastation that predatory lending and fraudulent transactions can cause. While the properties fraudulently placed in our clients' names were not their primary residences and they would not be affected by this particular bailout plan, we recognize the "fast and loose" mortgage-writing practices of just a few years ago created an environment ripe for the conspirators who victimized our clients. 

Only 4 percent of the numerous mortgages fraudulently issued in our clients' names were held by Countrywide, demonstrating that this issue is far more reaching than this single lender and the nearly half-million homeowners who will see some relief via this settlement. 

To date, nearly 85 percent of the fraudulent mortgages issued by Countrywide other lenders have been resolved by consent foreclosures negotiated by our firm.  The net result:  Our clients have been relieved of an estimated $20 million in debt liability.  Negotiations continue on the remaining properties.

To learn more about mortgage fraud and how we can help, read this Special Edition on Mortgage Fraud of our firm’s newsletter and check out The Law Blog category archives on mortgage fraud & foreclosure.