Published Thursday, Jan. 10, 2008 | 6:56 p.m.
Updated Thursday, Oct. 30, 2008 | 2:14 p.m.
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.