Attorney General John Kroger announced today that mortgage lending giant Countrywide Financial Corporation will pay $1 million to Oregon to settle potential legal claims resulting from Countrywide’s involvement in the national mortgage fraud scandal. Countrywide also agreed to stop offering certain controversial mortgage products and services, including some risky subprime and “low documentation” loans.

In a major development, Countrywide further agreed to modify the interest rates and loan terms for approximately 4600 Oregon families who obtained non-traditional mortgages from Countrywide. Countrywide, once the nation’s largest mortgage lender, estimates the total economic relief to Oregon borrowers at more than $90 million.

“This settlement holds Countywide accountable for the immense damage they caused to thousands of Oregon workers and homeowners. It will also help thousands of Oregonians stay in their homes during these tough economic times,” Attorney General John Kroger said.

Under the settlement, Countrywide agreed to contact eligible Oregon Countrywide mortgage holders. Countrywide mortgage holders who think they might be eligible for relief pursuant to the agreement can call the Oregon Department of Justice Consumer Protection Hotline at 1-877-877-9392 or online at https://www.doj.state.or.us.

• AVC (pdf)