Countrywide, the top U.S. mortgage lender, has agreed to renegotiate loan terms for 1,000 at-risk borrowers in metropolitan New York.
The move was prompted by New York senator Jeffrey Klein, who represents areas of the Bronx and Westchester counties.
“I think they’re all going to realize, not only for their only profit margin, but for the stability of our real estate market and the stability of our neighborhoods, it just makes sense to try to keep people in their homes by refinancing or reconfiguring their mortgages,” Klein said in a statement.
It is believed that the Calabasas, California-based lender has identified borrowers who are 60 days late on their mortgage payments, and that each will receive a letter from the senator’s office regarding a proposed loan modification.
The question remains whether a potential loan workout will be enough to save homeowners who may already be in over their heads.
Last month, Countrywide said that it would refinance about $10 billion in loans, modify another $4 billion, and negotiate an additional $2.2 billion in loans for people who are having trouble paying them off.
Countrywide said the proposed loan workouts would benefit 82,000 borrowers.
The news comes on the heels of fresh foreclosure data which revealed that filings were up 64 percent in NYC from the same period last year.