Working with national community advocacy group Association of Community Organizations for Reform Now (ACORN), Countrywide Financial Corp. plans to expand programs that could help borrowers hit by the subprime mortgage fallout.
The latest initiative calls for Countrywide to try to manage payment plans for borrowers that are already behind in payments, regardless of which type of subprime loan they have.
Borrowers with subprime hybrid adjustable-rate mortgages, which typically were issued with a low “teaser” interest rate and then adjusted higher after two or three years, could be offered the option of refinancing into a lower prime rate loan, or have their initial interest rate frozen for five years.
Homeowners with fixed-rate subprime loans who have fallen behind on payments could be offered short-term repayment plans, loan modifications or other adjustments, including having their interest rate frozen or adding their overdue balances to their principal loan amount.
Some 6.96 percent of the 9 million loans in Countrywide’s servicing portfolio were delinquent as of Dec. 31, up from 5.02 percent in December 2006.
About 1.04 percent of the mortgage loans, or 93,961, were pending foreclosure, up from 0.65 percent.
Last month, Countrywide agreed to be purchased by Bank of America Corp. for $4.1 billion in stock.
Source: Associated Press