Biggest Lender to Modify $16B in Mortgages
Facing a surge of possible foreclosures and potential federal legislation to strengthen lending standards, the nation’s largest home-mortgage lender will allow 82,000 or so customers holding some $16 billion worth of adjustable-rate mortgages to move into safer fixed-rate products.
Countrywide Financial Corp. announced today that it will offer the option of refinancing, by the end of 2008, to 52,000 subprime customers with $10 billion in loans. It will modify loans for another 20,000 customers holding $4 billion in mortgages that can’t be refinanced and 10,000 more who are already delinquent on $2.2 billion in mortgages, reports Reuters.
As discussed in earlier ABAJournal.com posts, federal legislation was introduced yesterday in the House of Representatives to strengthen mortgage lending standards. Meanwhile, Countrywide, as the nation’s biggest home mortgage lender, has been a target for criticism concerning lending practices that apparently were commonplace throughout the industry.
“Few companies benefited more from the mortgage mania than Countrywide, among the most aggressive home lenders in the nation,” writes the New York Times. “As such, the company is Exhibit A for the lax and, until recently, highly lucrative lending that has turned a once-hot business ice cold and has touched off a housing crisis of historic proportions.”
