Countrywide Financial Corp. said Tuesday that it will help many of its borrowers refinance their loans and keep their homes, as more calls for the firing of company's chief executive surfaced.
The Calabasas-based lender said it's going to launch an initiative to refinance or modify up to $16 billion worth of loans for borrowers who are facing an adjustable-rate mortgage reset through the end of 2008.
The plan is mainly set to assist subprime borrowers who signed mortgages that have adjustable rates that are now resetting higher, making them unaffordable to the borrowers and putting them in danger of foreclosure.
"Countrywide believes that 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," Countrywide's President David Sambol said in a press release.
Countrywide said that its refinance unit plans to contact 52,000 borrowers, holding about $10 billion worth of loans, with strong payment histories and give them options to refinance into prime loans or loans backed by the Federal Housing Administration.
The lender added that it will "supplement" its early notification process to find "affordable solutions" for an additional 20,000 borrowers, which it said amounts to about $4 billion in loans. Finally, Countrywide will help an additional 10,000 borrowers who are currently delinquent and facing foreclosure.
Separately, pressure is mounting for the ouster of Countrywide's Chief Executive Angelo Mozilo's as the company's share price continues to plummet and inquiries mount into his compensation and stock transactions.
The latest salvo came from Washington, D.C.-based CtW Investment Group, which sent a letter to Countrywide's lead director Harley Snyder on Monday asking that Mozilo be fired. CtW works with pension funds sponsored by unions and holds 3.5 million shares in Countrywide.
"We call upon the Countrywide Board of Director's to immediately secure the resignation of Angelo Mozilo, the company's chairman and chief executive officer," William Patterson, CtW's executive director, wrote in the letter.
The letter pointed to large amounts of stock the embattled head of the lender has sold recently as the company continues to tank. The Securities and Exchange Commission is informally looking into some of Mozilo's transactions.
"His continued presence is a distraction and an impediment to Countrywide's recovery," the letter continued.
Countrywide did not respond to requests for comment.
This is the second demand for Mozilo to be fired in the past week. Over the weekend, reports surfaced that Washington, D.C.-based American Federation of State, County and Municipal Employees, also asked the board to replace Mozilo with two independent directors.
Mozilo ranked seventh in the entire country on Forbes' 2007 report on CEO compensation, which was based on the previous year's pay.
Mozilo re-upped with the company last year after initially saying he was planning on stepping down. Mozilo is responsible for turning Countrywide into the nation's largest mortgage lender and decided last fall that he was going to stay on.
Shares in Countrywide were down 3.2 percent to $15.18.
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