Consumer Law

Countrywide Says it Will Help 80,000 Consumers Keep Their Homes

By Kemnitzer, Anderson, Barron, Ogilvie & Brewer

Millions of consumers are facing foreclosure due to risky adjustable-rate mortgages. Countrywide, one of the nation's largest mortgage lenders, has gotten a ton of bad press lately for its high-profile role in the crisis.

Yesterday Chris Arnold reported in a story on National Public Radio that Countrywide planned to refinance or modify some $16 billion worth of loans for more than 80,000 borrowers who will soon hit an unaffordable rate reset, or those who have already fallen behind after their payments rose. Some of those borrowers' interest rates had risen to as high as 13%.

It was good news for Neighborhood Assistance Corporation of America, a nonprofit national housing advocacy group that had organized protests outside Countrywide's headquarters just a few weeks ago. Countrywide even hired Neighborhood Assistance Corporation as a contractor to contact homeowners and figure out how much they can afford to pay.

But some critics are skeptical about how much far Countrywide's efforts will go to alleviate the crisis. Ira Rheingold, executive director of the National Association of Consumer Advocates, says the 80,000 loans Countrywide is committed to modifying is a small chunk of the 2 million people who face losing their homes.

On the other hand according to the story, critics also fault consumers for committing to more house than they could afford.

Full post as published by California Credit Law Blog on October 25, 2007 (boomark / email).