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December 17, 2014

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Foreclosure relief for Countrywide borrowers

The Las Vegas arm of the national community organizing group ACORN said today its parent organization has worked out a deal with giant lender Countrywide that could provide some relief for some of the 5,000 Clark County homeowners

feeling stuck in subprime Countrywide loans.

Las Vegas ACORN leader Mary Cowger said the new deal affects many borrowers facing foreclosure who aren't covered under terms the Bush administration negotiated with lenders — particularly the borrowers who are stuck in dreaded adjustable rate mortgages with Countrywide and have already fallen behind in their payments or have already seen their rates reset to a higher amount. Under the ACORN deal, those homeowners could set up a short-term repayment plans, or extend their loan terms, freeze their interest rates at the introductory level, or reduce their interest rates.

The deal was negotiated at the national level, but apparently Countrywide

couldn't make it to a scheduled teleconference call today so it was

postponed until next week. Las Vegas ACORN proceeded with its own press conference.

The terms announced today in Las Vegas are the same as what the national

organization will unveil next week, said Cowger.

"This is the bare minimum of what the lending industry should be doing,"

said Cowger. "We'll be calling on others to follow suit."

Cowger said a group of ACORN members are planning a "light action" at the

offices of GMAC Financial services next week, and will be asking that

lending company to follow Countrywide's lead in working out more favorable

terms with borrowers.

Here are highlights of the ACORN/Countrywide plan, according to a press

release issued by ACORN:

• A systematic approach to helping borrowers with hybrid adjustable rate

mortgages that have strong payment records but may face or are already

facing difficulty with higher payments at the point the interest rate

resets. Solutions in these cases include refinancing into a prime loan or

loan modification programs offering a five-year extension of the rate prior

to the reset, in keeping with the previously announced programs.

• For cases that do not qualify for streamlined assistance, ACORN counselors

and Countrywide home retention specialists will use Countrywide’s Workout

Waterfall to provide affordable home retention options that include

short-term repayment plans, and loan modifications. Loan modification

solutions include capitalization of overdue payments, extension of the loan term,

interest rate freezes at the introductory rate, and, under certain

circumstances, an interest rate reduction.

• Borrowers who cannot meet an established affordability standard even under

the restructured loan, or who decide they would be better off not retaining

the home, will receive home liquidation counseling.

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