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Countrywide to Refinance or Modify Up to $16 Billion in Loans
In a move to help more than 80,000 financially strapped borrowers, Countrywide Financial Corp., the nation’s largest mortgage lender, announced last week that it will restructure or refinance up to $16 billion in adjustable-rate mortgages that have recently reset or will reset by the end of 2008.
“Countrywide is committed to helping its customers sustain homeownership,” David Sambol, the company's president and chief operating officer, said in a press statement. “Countrywide believes that none of our subprime borrowers that have demonstrated the ability to make payments should lose their home to foreclosure solely as a result of a rate reset.”
As part of its home preservation program, which is geared primarily to subprime borrowers, Countrywide specialists will contact borrowers who are current in their mortgage payments and approaching a rate reset to determine their financial circumstances and advise them about refinance and loan modification options.
The mortgage lender’s new programs will help home owners who:
- Are currently in a subprime loan and have been making their payments on time. The company said it will contact about 52,000 borrowers to offer refinance options and will work to refinance about $10 billion of mortgages. Countrywide will offer to refinance them into a lower-interest prime loan or a mortgage insured by the Federal Housing Administration, Fannie Mae or Freddie Mac.
- Are currently in a prime or subprime loan and are unable to qualify for a refinance and likely to have difficulty affording an upcoming rate reset. Countrywide says it will modify $4 billion in loans through the end of next year that will enable approximately 20,000 borrowers to keep their homes.
- Are subprime borrowers who are currently in default on their loans as a result of a recent rate reset. Countrywide is sending letters to these borrowers offering a pre-determined, pre-approved rate reduction. The lender expects to modify about 10,000 of these loans, totaling $2.2 billion, by the end of this year.
Countrywide is encouraging consumers who face an increase in their mortgage payment or fear falling behind on their payments for any reason to call its home retention team at 800-669-6650.
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