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Countrywide Financial Corp., the nation's largest mortgage lender, said Tuesday it will begin calling borrowers to offer refinancing or modifications on $16 billion in loans whose interest rate is set to adjust by the end of 2008. Its shares fell more than 4 percent.
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The Calabasas, Calif.-based company said it would reach out to borrowers who are current on their loans but are facing an imminent rate reset to discuss options. Countrywide said it would refinance about $10 billion in loans and modify another $4 billion.
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It also plans to contact borrowers of some $2.2 billion who are late on their loans and having trouble paying because of a recent rate reset.
In total Countrywide's plan would reach out to about 82,000 borrowers for some kind of relief.
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Can this be anything more then a temporary fix to the current situation? I am not an expert on this but it would seem to me that all Countrywide is doing is delaying the inevitable. Perhaps some of the real estate gurus could chim in?