ACORN and Countrywide have signed an agreement of “best practices” in order to minimize the number of families facing foreclosure due to adjustable rate mortgage rate resets and other difficulties.

Some highlights of the agreement include:

• Refinancing options for subprime hybrid ARM borrowers with strong payment history and good credit and some equity, through prime refinancing, Fannie Mae and Freddie Mac’s expanded criteria program, or FHA Secure program.  Refinancing is unlikely to help many borrowers because of credit crunch.

FOR FAMILIES WHO ARE CURRENT ON THEIR PAYMENTS

• Countrywide will automatically offer a pre-approved 5-year extension of the initial rate to any borrower who was current prior to the reset but subsequent to the reset fell behind in payments.
• Borrowers that reach out to Countrywide prior to reset will be offered the 5-year extension if the new rate would be unaffordable to them.

FOR FAMILIES WHO HAVE FALLEN BEHIND

• Countrywide will work with borrower to establish an affordable repayment plan, either through 4-6 month repayment schedule, modification resulting in capitalization of arrearages, extension of the term of the loan, or 3-month repay-to-modification solution.  Many times no repayment plan is affordable.
• When no repayment plan is affordable, Countrywide will evaluate a restructure scenario including rate reduction, capitalizing arrearages, and waiving late fees on payments that are part of the restructuring.
• If a borrower’s situation is temporary, like a short-term disease or unemployment affecting the ability to pay the mortgage, Countrywide may offer a 2-year rate reduction after which there will be another review.
• Countrywide will offer 5-year freeze for any non-temporary situation involving death, divorce, permanent disability, military deployment, or recent history of low income.

GENERAL TERMS

• Countrywide and ACORN will continue to meet to review and improve the agreement.
• Must establish that foreclosure sale is a greater loss than restructured loan, property is occupied by owner, and borrower only owns one property to qualify.
• The agreement took effect on January 31, 2008

FOR HELP

Call ACORN at 1-866-67-ACORN or Countrywide’s Home Retention Division at 800-669-6650.