Foreclosure Preventive Steps
Posted on May 8, 2008
Filed Under Foreclosure Homes | 4 Comments
The critics of Countrywide have been won over. The reason for Countrywide winning laurels is for the effectiveness of its foreclosure preventive steps. The company has reached out to enfold in its measures nearly all the ARM borrowers. The giant mortgage lender has rolled out fresh rescue operations to mitigate the repo homes crisis.
The President of the National Housing Conference, Conrad Egan, said that the programme can be taken up as a model exercise showing the way of how to save families under pressure of foreclosures. The spokesperson of National Foundation for Credit Counseling, Gail Cunningham, said that any move in this direction is welcome. It can change the course of history. Bruce Marks of Neighborhood Assistance Corporation of America had been one of the vociferous critics of Countrywide is now enthusiastically actually now working with it.
Countrywide is about to modify loans for the people and bring it down to affordable levels. It involves a two pronged attack – counseling and stern budgeting. Countrywide will scrutinize the income of the borrowers and follow of policy of backing in the loan to balance the budget. The interest rate will be reduced to reach the correct level. The programme is already being worked out and has a tremendous impact on house owners. The rate of interest has been lowered to a surprising rate of 5%. The target of Countrywide’s measures is the ARM’s – the loans that had become toxic.
Three primary groups will benefit from the scheme. In the first group are 52,000 borrowers who have been so far current in their commitments with good credit history. Attempts will be made to make their loans over to fixed rate options by refinancing. The fees and charges for the change over will be competitive so that Countrywide hopes to retain most of its customers. In the second group will be 20,000 borrowers who will get more time (about five years) to continue with low rates. These groups also have not fallen behind in payments but are at risk once the rates go up. The hope is that with time the financial health of the borrowers might improve as also the real estate market. In the third group 10,000 borrowers will get rate reductions. In this section are those who have fallen behind in their payments. Their rates will be lowered so that they can move along to finally own the house. Small groups left out are those who are without jobs and have fallen too far behind to catch up.
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