In what should be regarded as a model for how mortgage lenders should be compelled to fixed the mortgage crisis, Countrywide,

[a]long with the direct relief,...will waive late fees of $79 million and prepayment penalties of $56 million and suspend foreclosures on delinquent borrowers with the riskiest loans.

A foreclosure relief fund will be created with $150 million from Countrywide to help borrowers who are four months or more behind on their payments or whose homes have already been foreclosed on. The company will also provide $70 million to help troubled borrowers relocate to rental housing. In all, Countrywide is setting aside $8.7 billion to help borrowers.

...Under the terms of the settlement, Countrywide will reduce principal balances in some cases and cut interest rates in others. Rates could decline to 2.5 percent, depending upon a borrower’s ability to pay, and remain at that level for five years. Then the rate will adjust to prevailing interest rates charged by Fannie Mae on its fixed-rate mortgages.

What's significant about this program is that it reveals the culpability of lenders in the foreclosure crisis, as well as the responsibility they should assume in helping homeowners avoid foreclosure. Although Countrywide does not admit to any wrongdoing - standard practice in these types of agreements - investigations into Countrywide's practices revealed massive acts of underwriting and sales abuse, thus demonstrating how many lenders either manipulated or did not fully disclose the terms of their mortgages.