Countrywide Launches $16B Customer Aid Effort

Countrywide Financial Corp., Calabasas, Calif., has unveiled a $16 billion effort to help ailing mortgage customers -- subprime and prime alike -- to refinance out of loans that are either delinquent or run the risk of going bad over the next 15 months.As a share of subprime loans Countrywide services, the effort represents 13% of its A-minus to D portfolio, according to the Quarterly Data Report. The company, which is scheduled to report earnings on Oct. 26, said it hopes to refinance $10 billion in subprime loans (52,000 Countrywide customers), offering its clients a Federal Housing Administration or Fannie Mae/Freddie Mac loan. Additionally, it hopes to refinance $4 billion in prime and subprime loans where the borrower is current but unable to refinance or might have difficultly making the payment once the loan rate resets. On $2.2 billion in subprime loans where the borrower is actually delinquent because of a recent reset, Countrywide said it will implement what it calls a "simplified loan modification process" that reduces the interest rate. National Mortgage News recently reported that nonprofits ACORN and the National Training Information Center are increasingly finding it difficult to work with the loss mitigation staff of Countrywide. The company has a 20% delinquency rate on its subprime portfolio. It can be found online at http://www.countrywide.com.