Lender to refinance $16 billion in ARMs
By Noelle Knox
USA Today
Countrywide Financial plans to announce today that it will restructure or refinance $16 billion in adjustable-rate mortgages that have recently reset to higher rates or will reset by the end of next year, stretching some homeowners to the breaking point.
Its plan comes as the mortgage industry tries to head off mounting political and public pressure and an alarming foreclosure rate.
Countrywide, the nation's largest mortgage lender, says its program will help about 82,000 borrowers, mainly those with "subprime" credit.
"Changes in the housing market have occurred, and the trends are weakening," David Sambol, Countrywide's president, said in an interview yesterday. "Our leadership position in the marketplace requires us to do more.
"Our desire to help our borrowers very much aligns with our interests: helping people stay in their homes and avoiding foreclosure losses for our company and our investors."
The plan would benefit Countrywide borrowers who:
But those who fall behind because they've lost their jobs and lack enough income to keep up with a mortgage won't qualify.
Last week, Treasury Secretary Henry Paulson warned of an "immediate need" for more loan restructurings and modifications.
