Countrywide Launches Program To Refinance Or Modify $16B In Adjustable-Rate Mortgages
Tuesday, October 23rd 2007, 8:51 am
By: News On 6
CALABASAS, Calif. (AP) _ Countrywide Financial Corp., the nation's largest mortgage lender, said Tuesday it will begin calling borrowers to offer refinancing or modifications on $16 billion in loans whose interest rate is set to adjust by the end of 2008.
Countrywide has been under fire from all sides since early July _ it has had difficulties with loan financing, its chief executive is under fire for selling hundreds of millions of dollars in stock and it is under pressure from the government to help keep people from losing their homes.
``Unprecedented times call for unprecedented remedies,'' Countrywide President and Chief Operating Officer David Sambol said in a statement. ``We are determined to assist borrowers who have the willingness and wherewithal to remain in their homes, but need a little help to do it.''
Countrywide said it would reach out to borrowers who are current on their loans but are facing an imminent rate reset to discuss options. Countrywide said it would refinance about $10 billion in loans and modify another $4 billion.
It also plans to contact borrowers of some $2.2 billion who are late on their loans and having trouble paying because of a recent rate reset.
In total Countrywide's plan would reach out to about 82,000 borrowers for some kind of relief.
Subprime mortgages _ those made to people with poor credit histories _ have become a problem for the global economy. As subprime mortgages made from 2005 through the first half of 2007 defaulted at increasing rates, bonds backed by those mortgages began to lose value.
More than 50 mortgage lenders have gone out of business this year. A seizure in the global credit markets precipitated by the mortgage crunch has led a consortium of banks to propose a fund of up to $100 billion to buy distressed assets.