Countrywide Easing Terms On .14% Of Mortgage Portfolio. So What?

September 25, 2007

Countrywide Financial Corp. announced today, September 25, 2007, that it would be altering the terms for 35,000 home loans this year to avert foreclosures. Changes include repayment plans, postponement of payments, refinancing and modifications that bring loans out of default, the company said in a statement.

Countrywide handled billing and collections for about 9 million loans at the end of August, the Calabasas, California-based company said in a Sept. 13 report. So that means that Countrywide is going to assist borrowers in .14% of its entire loan servicing portfolio.

The U.S. Treasury Department and Federal Reserve have urged mortgage companies to stave off foreclosures by cutting or postponing payments for cash-strapped homeowners. They will surely be pleased that Countrywide is taking the bull by the horns.

“This is a great, unprecedented effort to help homeowners,” Steve Bailey, Countrywide’s delusional senior managing director of loan administration, said in an interview. Countrywide, which services about one of every five U.S. mortgages, plans to meet with Moody’s executives to discuss the issue, he said.

Bailey also claims that the impact of higher resets of adjustable rate loans is widely overstated. Countrywide found that only 1.3 percent of foreclosures in July stemmed from homeowners unable to pay higher interest rates, he said. While that percentage will increase in coming months, he predicted it would remain well below 20 percent. But even if that’s all true, why didn’t Countrywide make an effort to modify the loans of 1.3 percent of its borrowers, those who are in trouble due to the toxic mortgages foisted upon them in recent years?

Posted in Mortgage Meltdown