ACORN, Countrywide Reach Pact

Countrywide Financial Corp. and the Association of Community Organizations for Reform Now have reached an agreement on ways to help delinquent subprime borrowers get into workout plans and save their homes. "We have created a comprehensive approach that fills the gaps in the Hope Now plan," said ACORN president Maud Hurd, and provides relief for all homeowners with unaffordable subprime mortgages. Countrywide has agreed to freeze the interest rate for delinquent subprime borrowers who can no longer make their monthly payments due to a reset on their adjustable-rate mortgage. "It is automatic, it capitalizes arrears, and it ensures that borrowers are free from unaffordable rate increases for the life of their loans," ACORN said. The Hope Now plan engineered by Treasury Secretary Henry Paulson freezes the interest rate for borrowers who are current but are expected to run into trouble once their subprime loan resets to a higher interest rate. Countrywide and ACORN officials are slated to present more details about the agreement at a news conference on Jan. 17.