Update: Countrywide to rework up to $16 billion in loans

Breaking news item from Bloomberg: "Countrywide Financial Corp., the biggest U.S. mortgage lender, may change terms on $16 billion of adjustable-rate mortgages before the end of 2008 so borrowers won't lose their homes to foreclosure."

More: "About 52,000 customers who hold subprime loans can refinance into prime and government-backed loans, the Calabasas, California-based company said today in a statement."

--Update: Here's the Countrywide press release describing the program.
--CNBC headline: "Countrywide Offers Help For 82,000 Borrowers"
--Reuters via CNBC: "It announced the program as pressure mounts on the mortgage industry from politicians and consumer groups worried about rising foreclosures to clean up lending excesses, and make only home loans that consumers can afford in the first place."
--CNBC blogger Diana Olick observes that Countrywide is "saving its own skin" -- because sub-prime loans are failing at a far higher rate than Countrywide or any other big financial firm has admitted -- but is also doing the right thing.

Thoughts? Comments? Insights? E-mail story tips to lalandblog@yahoo.com.
Photo Credit: EPA via Los Angeles Times.

Comments

[TakeFive]

Those of you with Countrywide loans - READ your new loan docs before signing. I just can't wait to find out in what creative ways CW is going to "help". Will they keep the payment at the teaser rate, but extend the loan to 40 years? Will they add service fees to the loan balance? Don't expect CW to do you any favors.

Will the press dig out the details of this loan program, or will they help CW with PR by keeping silent on the ugly details?

Peter - how about a quick call to CW from the LA Times seeking details on this program?

[shockg]

Whats this? Positive news on a negative bear blog?? Too bad angry renters.

[Tony]

Good news for those who can afford a fixed interest rate. Not sure how this will affect those who were stretched on a teaser rate to begin with. I'm thinking this will only delay foreclosures, not eliminate them.

[longdriver]

Countrywide just updated their list of REO's, it went from 13,000 to 195,000. They added they REOs for the bad loans they also service. So if they already are dealing with nearly 200,000 foreclosures it will be of little help "offering" work outs on 52,000 or even 82,000. A large percentage of those people will probably not qualify anyway for one reason or another (low income, homes worth less than they owe). It's more smoke and mirrors.

[pugtv]

That's awesome ShockG. You can finally unload that Compton 400 sq foot shack you live in. Good for you. lol.

[are they crazy]

I wonder if they will do a better job of figuring out the truth before the help folks - are they going to help investors, speculators, flippers, folks that lied on their applications, folks that used their homes as ATMs? It's not as if Countrywide did this all on their own - it took lots of either stupid or greedy people to help them along.

[Toby]

"...Too bad angry renters."

Posted by: shockg

Angry is being upside-down on a 700,000 dollar 1200 sq.ft "flipper" house.

The worst thing you can call a renter is transient. Which depending on their situation may or may not be a good thing.

[ProblemWithCaring]

pugtv

lol.

Leave ShockG alone. He doesn't live in that shack in Compton. He is a realtor, trying to sell the shack in Compton (to make another mortgage paymenton his on highly leveraged, overpriced 774 sf pre-war shack in INGLEWOOD. Thank you.)

[Cal]

"At the end of September, Countrywide reported 5.87 percent of the 8.98 million mortgages it services were delinquent, or nearly 530,000 loans. Countrywide said today it has completed 20,000 loan modifications so far this year."

http://www.inman.com/inmanstories.aspx?ID=64991

Perspective on the numbers.