Banks Starting to Modify Mortgages Under U. S. Treasury Refinance Program

Throwing a lifeline to homeowners under water on their mortgage obligations, the U.S. Treasury announced its Home Affordable Refinance Program in mid-February. The program is supposed to facilitate mortgage servicers in modifying troubled homeowners’ mortgages so that their monthly payment is reduced to no more than 31% of gross monthly income. Eligibility requirements include that the loan have been originated on or before January 1, 2009 and that the mortgage is a first lien on owner-occupied property. The unpaid principal balance can be up to $729,750. Income must be documented and the homeowner must sign an affidavit of financial hardship....

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Countrywide Says it Will Help 80,000 Consumers Keep Their Homes

Millions of consumers are facing foreclosure due to risky adjustable-rate mortgages. Countrywide, one of the nation’s largest mortgage lenders, has gotten a ton of bad press lately for its high-profile role in the crisis. Yesterday Chris Arnold reported in a story on National Public Radio that Countrywide planned to refinance or modify some $16 billion worth of loans for more than 80,000 borrowers who will soon hit an unaffordable rate reset, or those who have already fallen behind after their payments rose. Some of those borrowers’ interest rates had risen to as high as 13%. It was good news for...

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