DES MOINES -- Iowans in danger of defaulting on home mortgages with Countrywide Financial Corp. will soon be able to adjust the terms of their loans to make payments easier.

Bank of America, which bought Countrywide in July, has agreed to offer more than 1,100 Iowans adjustments on the terms of their loans to avoid foreclosure, according to Iowa Attorney General Tom Miller's office.

The adjustments will vary depending on the circumstances of the borrower, but the agreement could mean an automatic freeze or reduction in interest rates, conversion to fixed-term loans and refinancing or reduction of principal owed.

Bank of America reached the agreement with several states late Friday, and Miller was a lead negotiator in the proceedings.

Between one quarter and one half of all Countrywide subprime loans in Iowa are delinquent, depending on the type of loan, according to Miller's office.

Countrywide is the largest provider of subprime mortgages in the U.S.

The loan adjustment program will begin Dec. 1. Countrywide customers in Iowa can call (800) 669-6607 for more information.

The settlement resolves allegations that Countrywide tried to deceive some borrowers by signing them up for structurally unfair and unaffordable loans. The agreement does not signify an admission of wrongdoing, however.

Bank of America also agreed to cut back on offering adjustable rate mortgages as part of the agreement and to pay $150 million to states nationwide in a foreclosure relief program for eligible Countrywide customers.

The states may use up to half of those funds for programs to prevent foreclosures.

Contact Fred Love

at (515) 243-0138 or

fred.love@lee.net.