Wednesday, October 24, 2007

Countrywide to Restructure Loans

Here's a piece about the country's largest mortgage lender expressing a willingness to restructure some of their ARMs.

Countrywide’s program has three parts. First, employees in a newly created refinance unit will contact 52,000 borrowers holding roughly $10 billion in mortgages and offer alternatives to their existing loans. New options could include loans backed by the Federal Housing Administration or those available under programs offered by Fannie Mae and Freddie Mac, the big government-sponsored entities that finance billions in home loans.

Countrywide did not specify the interest rates on the refinanced loans, but subprime loans typically have higher rates than those backed by the government-sponsored entities.
In addition, Countrywide said it would identify borrowers who are current on their loans but who may have difficulty meeting the higher payments when their adjustable loans reset. For these customers, Countrywide said it would extend the initial interest rate for five years. Some 20,000 prime and subprime borrowers whose mortgages total $4 billion fall into this category, the company said .

Finally, Countrywide said it would bring interest rates back down to initial levels on an estimated 10,000 delinquent borrowers whose adjustable loans reset. Mortgages held by these borrowers total $2.2 billion, the company estimated.

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