Montbello resident Sharon Johnson has sought relief since October from an adjustable-rate mortgage whose payments have skyrocketed.
She might finally get it. Countrywide Financial Corp., which services her loan, said Monday that it will offer more assistance to borrowers such as Johnson who are behind.
The changes come after lengthy discussions between the nation’s largest mortgage lender and the Association of Community Organizations for Reform Now.
Countrywide previously focused on helping subprime borrowers with hybrid adjustable-rate mortgages who had stayed current. Now it will aid borrowers with fixed-rate subprime mortgages as well as delinquent borrowers.
“I am hoping this agreement will help my situation,” said Johnson, who faces the loss of her home of 20 years.
A key benefit of the agreement is the streamlining of assistance efforts. Lenders can turn around new loans in days but deal with delinquencies on a case-by-case basis, creating lengthy delays. Johnson was told in October her workout would take 10 days. As of mid-February, she is still waiting.
Countrywide, under the agreement, will offer interest-rate freezes or rollbacks to the initial interest rate for a five-year period. Delinquent borrowers may also be offered short-term or long-term repayment plans for overdue amounts or the chance to roll late payments back into the loan.
Johnson hopes to regain the 7.75 percent interest rate she started at, if not lower. Her loan charges 10.5 percent, adding $480 to her monthly payments.
Falling home prices have shaved $34,000 off the value of her home in recent years, blocking efforts to refinance the loan, Johnson said.
Countrywide did leave itself an out, saying agreements with investors backing its mortgages could limit the modifications offered.
Countrywide services about 9 million mortgages in the United States. More than 700,000 are considered subprime.
Aldo Svaldi: 303-954-1410 or asvaldi@denverpost.com
