Countrywide Settlement FAQ

February 2010

1.  When were the checks mailed to consumers?

Checks to eligible consumers who submitted claim forms were mailed on February 12, 2010.  Approximately 2200 Michigan consumers submitted valid claim forms and will receive approximately $3,000.  The settlement administrator advises that checks may take as long as 2 weeks to arrive.

2.  Where can I call if I have questions?

Consumers with questions should call the settlement administrator, Rust Consulting, at 1-866-411-6987.

3.  When do the checks have to be cashed by?

Checks must be cashed by May 13, 2010. 

4.  My check came with a Form 1099.  Do I have to fill that out?

While checks came with a Form 1099, the individual consumer must determine if they need to complete and submit the form.  If you have questions about this form you need to talk to you own attorney or tax advisor.

5.  Why is the payment higher than the $1,800 originally announced last year?

Not all eligible consumers submitted valid claim forms.  The money available for Michigan consumers was split among the number of claims submitted.

6.  When were eligible consumers notified?

Eligible borrowers were initially sent claim forms in July, 2009.  Multiple mailings were sent.

7.  Who was eligible for the payment?

Generally, the eligibility criteria included:

• The loan was originated by Countrywide.

• The first payment on the loan was due from Jan 2004 - Dec. 2007.

• The loan was a subprime loan or a pay option arm.

• The home was owner-occupied.

• The owner was not able to keep up with the loan payments and consequently lost the home between 2004-2008.

8.  What is a "subprime" loan?

"Subprime" generally refers to loans that combine higher risk features for the lender (low documentation or no documentation origination, low equity ratios, cash-out financing, etc.) with higher risk borrower profiles (low credit scores, recent bankruptcy or foreclosure, etc.)

9.  What is a "pay option arm?"

A "pay option arm" is an adjustable rate mortgage that allows the borrower to choose among two or more payment options -- hence "pay option."  These options sometimes included interest-only payments or minimum payments that were insufficient to cover current interest due on the principal amount.  In that instance, the principal balance grew when the borrower did not pay enough to cover the currently due interest amount.

10.  Can I file a claim form now?

No.  It is too late for consumers who have not already done so to submit claims now.  It was necessary to set a final cut-off date so that a final number of eligible claimants could be determined and the funds divided among those claimants.  An experienced settlement administrator was hired who used the best processes available to identify eligible borrowers, locate them, issue multiple notices, and process the claims.

11.  How were eligible consumers located?

Once eligible loans were identified in Coutrywide's database, the settlement administrator performed a thorough skip trace search to locate the eligible consumers and send out the notices.  The search uses name, last known address, and SSN (if available).  It searches against several thousand databases comprised of public records and credit bureau reporting as well as other proprietary sources.  This search is one of the most thorough trace processes available and the settlement administrator was hired as it had the experience and expertise in conducting these searches.  This is the type of trace that courts often refer to as a "skip trace," which got its name because creditors use it to locate people who are trying to "skip" out on paying debts.

12.  I still have questions.  Who should I contact?

If you have additional questions about the Settlements, contact the Settlement Administrator at 1-866-411-6987 or 1-866-595-8397 (hearing impaired).  If the Settlement Administrator is not able to answer your questions, they will contact the appropriate entity.