Countrywide Financial Corp, the largest U.S. mortgage lender, said Monday it will help customers refinance or modify up to $16 billion of adjustable-rate mortgages through next year.
Unprecedented times call for unprecedented remedies, Countrywide President and Chief Operating Officer David Sambol said in a statement.
The move comes as the mortgage industry faces an increasing number of delinquencies with borrowers increasingly facing difficulties in making payments amid a downturn which has seen decreasing home prices.
About 2 million mortgages are set to see their rates increase by the end of 2008, according to U.S. government figures.
The company says it will reach out to borrowers to present them with options. A total of 82,000 customers will be covered under the plan.
``None of our subprime borrowers that have demonstrated the ability to make payments should lose their home to foreclosure solely as a result of a rate reset,'' David Sambol, Countrywide's president and chief operating officer, said.
About 52,000 customers with poor credit histories who qualified for so-called 'subprime' loans worth a total of $10 billion will be able to refinance through next year. About 20,000 prime and subprime borrowers who cannot refinance will be able to modify their loans, which are worth about $4 million. Remaining customers who have already missed payments on loans - totaling $2.2 billion - will also be helped with loan modifications.
Countrywide currently services $1.46 trillion in mortgages.