Countrywide to Refi $16 Billion (before ARMs Reset)
Countrywide to Refinance Up to $16 Billion of Loans
CFC - today announced a comprehensive home preservation program to reach out to borrowers at-risk of default. Countrywide will launch an outbound calling initiative to refinance or modify up to $16 billion of Countrywide loans for borrowers who are facing an adjustable-rate mortgage reset through the end of 2008.
Oct. 23 (Bloomberg) -- Countrywide Financial Corp., the biggest U.S. mortgage lender, plans to refinance or restructure as much as $16 billion of debt for home buyers facing higher payments on adjustable-rate mortgages before the end of 2008.
Countrywide has already refinanced $5 billion of loans and plans to contact 52,000 subprime borrowers with $10 billion of debt to offer new loans, the Calabasas, California-based company said today in a statement. It may modify terms on as much as $6.2 billion of mortgages for borrowers ineligible for refinancing.
Countrywide's stock has fallen 63 percent this year amid the worst housing slump in 16 years, which left the mortgage lender short of cash in August. Homeowners with poor credit histories risk losing their homes as mortgage payments jump.
``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,'' David Sambol, the company's president and chief operating officer, said in the statement.
Last week, Countrywide said it will take a pretax restructuring charge of as much as $150 million to cut operations and as many as 12,000 jobs because of slower lending. About $57 million of the expense will be booked in the third quarter with the remainder in the fourth.
Subprime mortgages are available to borrowers with bad or incomplete credit histories. They made up about 20 percent of home loans issued last year and about 11 percent in the first half of this year, according to Inside Mortgage Finance, an industry newsletter.
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posted by Victor Lloyd Smith @ 12:39 PM
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