Countrywide, the nation's largest mortgage lender, will refinance $16 billion worth of subprime home loans. The move will allow 80,000 customers with adjustable-rate mortgages to get lower rates, making it more likely that they'll keep their homes. Countrywide will make less money from the new arrangement, but fewer mortgages will fail outright, Bloomberg reports.
"Lending has never been an altruistic business, but having lots of failed transactions on your books is never good," says a mortgage researcher. Treasury Secretary Henry Paulson has pushed lenders to refinance home loans. “Unprecedented times call for unprecedented remedies,” says the president of Countrywide, according to the Financial Times.