I’ve been saying it for years now.. Mortgage companies are in business to collect interest income on their money, not to be property managers.  The LAST thing they want to do is end up owning a bunch of property.  Thanks to Morgan over at Blown Mortgage, I’ve been enlightened with Countrywide’s most recent move to prove my point.

To help make the home loan modification possible and much more efficient, Countrywide has partnered with consumer group known as ACORN.  ACORN has been known as a group that had campaigned against companies such as Wells Fargo and Countrywide for predatory lending.  Interesting to see them finally working together in an effort to avoid an even more messy situation.

Here are some highlights from the agreement that is being worked on between ACORN and Countrywide.

“A systematic approach to helping borrowers with subprime hybrid ARMs
who have strong payment records but may face or are already facing difficulty with higher payments as the result of interest rate resets.  Solutions in these cases include refinancing into a prime loan or a loan modification program offering a five-year extension of the rate prior to the reset, consistent with the previously announced programs.  This portion of the initiative is backed up by a proactive outbound calling and mailing campaign to contact borrowers and discuss their
options.

For delinquent subprime fixed rate and ARM borrowers who want to stay
in their homes, ACORN counselors and Countrywide home retention
specialists will utilize a streamlined approach to provide affordable
home retention options that include short-term repayment plans or loan
modifications in line with identified affordability standards. Loan
modification solutions include capitalization of arrearages, an
interest rate freeze or rollback to the pre-reset rate, and, under
certain circumstances, an interest rate reduction.”

As Morgan pointed out, Countrywide is making a pretty good move in showing they’re serious about improving their image and ACORN lends a lot of creditability to the situation.

Stay tuned to hear more about companies making loan modifications a more common practice.