USA''s largest mortgage lender moves to ease borrowers'' misery before Congress forces its hand

24 October 2007

However, analysts said the move, which the company''s COO called an "unprecedented remedy" in a media release, is just a public relations measure to draw attention to something that Countrywide and other large mortgage houses have already been doing.

CFC said it has created a special finance unit with about 2,700 employees to work with borrowers who are more or less able to meet their present mortgage payments, but are likely to have trouble continuing to make payments once their adjustable rate mortgages are reset with higher interest levels.

Countrywide seems to be in urgent need of good PR. In its third-quarter earnings, scheduled to be released on 26 October, analysts expect the company to report a net loss of around $1.10 a share.

The company has said it is prepared to refinance up to $10 billion in mortgages and modify the terms of another $4 billion that doesn''t qualify for refinancing. Countrywide said it will give borrowers who qualify the option to refinance into a prime loan or one insured by the Federal Housing Administration.

For borrowers with credit issues, the company will offer Fannie Mae or Freddie Mac''s expanded criteria programs. So far this year, Countrywide said it''s helped more than 31,000 borrowers refinance to prime fixed-rate mortgages, totalling more than $5 billion.

Countrywide also plans to offer a pre-determined reduced rate to borrowers of an additional $2.2 billion, who are late on their loan payments and are having trouble paying because of a recent rate reset.