More than 10,800 Illinois families with home loans from troubled Countrywide Financial are about to get some relief. The nation's No. 1 subprime mortgage lender settled a massive fraud suit Monday by agreeing to cut some loan rates to as low as 2.5 percent.

Some foreclosures will be suspended while homeowners modify their loans, sparing them from being thrown out of their houses.

Some borrowers will get cash payments as compensation.

Altogether, the settlement means loan relief of about $185 million for Countrywide customers in Illinois, Attorney General Lisa Madigan announced.

The agreement ends the fraud suit by Illinois and 10 other states. Missouri was not a party to the case.

A spokesman for Attorney General Jay Nixon said the state still could join to let Countrywide's Missouri customers become eligible for the same relief.

In Illinois, Countrywide will:

• Suspend foreclosures on the riskiest loans to determine if borrowers should have their rates cut.

• Waive late fees and prepayment penalties.

• Make cash payments totaling $8.5 million to some borrowers who have lost their homes to foreclosure.

• Help homeowners through a $1 million relocation assistance program.

Countrywide will pay $1.7 million for Madigan's part of the investigation.

For eligible borrowers, interest rates could be reduced to as low as 2.5 percent for five years, Madigan said.

Countrywide also agreed to drastically modify future lending practices.

Madigan called it the largest predatory lending settlement in history. Nationally, 400,000 borrowers are expected to see their loans reduced by $8.4 billion.

The settlement will keep thousands of Illinois residents from losing their homes, Madigan said.

She said the settlement holds Countrywide "accountable for deceptively putting borrowers into loans they didn't understand, couldn't afford and couldn't get out of."

The attorneys general sued Countrywide in June, the month before the Bank of America purchased the troubled lender. Bank of America issued a statement Monday saying it had "developed innovative programs to help as many Countrywide customers as possible stay in their homes."

The agreement doesn't stop borrowers from making their loan payments, Madigan's office said.

Homeowners with questions can call Bank of America at 1-800-669-6607 or Madigan's Homeowners Referral Hotline at 1-866-544-7151 from 8 a.m. to 8 p.m. Monday to Friday.