Countrywide and ACORN Reach Agreement to Help Homeowners

January 10, 2008 No Comments »

Struggling mortgage lender Countrywide and consumer advocacy group ACORN have reached an agreement to assist homeowners who are already in default avoid foreclosure.

The plan, which is said to fill in the gaps stemming from the HOPE NOW plan touted by the Bush Administration, will be explained in detail on January 17.

The agreement “substantially raises the floor of foreclosure prevention standards recently established by the HOPE NOW plan,” ACORN said in the statement.

According to ACORN, the initiative will go a step beyond the interest rate freeze plan, offering assistance to homeowners already behind on their mortgage payments.

The news comes as foreclosures and delinquencies rise to record highs at Countrywide, and as its share price grapples with record lows.

The pace of loan modifications has been slow thus far, with just 3.5 percent of mortgages slated to reset higher in the first eight months of 2007 being modified by September, according to Moody’s Investors Service.

ACORN had previously protested outside many of Countrywide’s branches, claiming the lender did little to help at-risk homeowners save their homes.

This could be a sign that Countrywide is looking to reduce losses itself, considering the amount of pressure it’s under financially.

In October, the lending giant said it planned to modify $4 billion in loans for 20,000 prime and subprime borrowers who were unable to refinance, and another $2.2 billion in loans for subprime borrowers who were currently delinquent.

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