In an effort to proactively address the steep increase in foreclosure rates, Countrywide announced today that through their new “Home Preservation Program”, they intend to reach out to their subprime and prime borrowers who are either facing an interest rate reset by the end of 2008, or are currently behind in their payments.
Countrywide has said that they will embark on this task, by using two methods. First, they will set out to refinance 52,000 of their borrowers who are in a subprime loan, and get them into a prime or FHA loan with more favorable terms that may enable the borrow to avoid falling behind in the future due to an ever increasing upward rate adjustment that is typical of subprime loans. Countrywide likes to tout their record on converting subprime borrowers into prime, they say that year-to-date they have helped 31,000 different borrowers do this.
But, not all subprime and prime borrowers can qualify for a refinance. For this group, Countrywide will set out to modify 20,000 loans (loan modifications). In order to accomplish this goal, Countrywide will contact all of their “at risk” borrowers by mail and phone no later than three months prior to their rate adjustment in order develop an “affordable solution”, per their press release. Countrywide will only be focusing on loans that will reset and adjust by the end of 2008. Depending on market conditions and progress made, we may very well see that extended, although it will be a good sign for the market if they find it unnecessary to continue with the effort of “saving” at risk home owners with options they would have never been solicited on in the past. Normally the at risk borrower would always have to beat down the door of the lender and jump through hoops in order to do a loan modification, or refinance into a prime loan from a subprime loan. How the tides have changed!
Review the Countrywide Press Release: Countrywide Announces a $16 Billion Comprehensive Home Preservation Program
Countrywide has set up a Home Retention Team in order to take your calls if you feel that you will be falling behind in your payments or are concerned about a pending upward adjustment in your interest rate. Call 800-669-6650 to reach the Home Retention team.
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Robert Mickalson, Realtor
Vintage Sotheby’s International Realty
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