Phila. groups helping late borrowers

Regina Taylor was in a heap of financial trouble last month.

The payment on the $78,000 adjustable-rate mortgage for her house in Mount Airy climbed from $515 to a scheduled $1,010 this month.

Taylor, 53, a grandmother of eight, had fallen behind the year before after a job loss and couldn't catch up, barely escaping a sheriff's sale last summer.

Then last month, Countrywide Financial Corp. agreed to modify her loan, giving her a fixed payment of $535 a month, including taxes and insurance.

"Everything worked out really well," said Taylor, who went to Cleveland last month to meet with Countrywide officials as part of the Philadelphia Unemployment Project's campaign to switch delinquent borrowers to affordable fixed-rate mortgages.

A menacing increase in delinquent subprime loans like Taylor's drove Countrywide, the nation's largest mortgage lender, to be rescued from possible bankruptcy by Bank of America Corp., which said yesterday that it would pay $4.1 billion in stock for Countrywide, of Calabasas, Calif.

Bank of America plans to dump Countrywide's huge subprime business, Ken Lewis, the Charlotte, N.C., bank's chief executive officer, said yesterday during a conference call.

But until then, Countrywide's mortgage-servicing arm is dealing with a surge in delinquent loans - many of them subprime - from 411,583 in December 2006 to 628,820 last month.

Next week, Countrywide plans to announce an agreement with the Association of Community Organizations for Reform Now, or ACORN, to contain an anticipated flood of foreclosures by streamlining procedures for moving delinquent subprime borrowers into affordable loans.

Marcia Morgan-Coleman is among the Philadelphia borrowers seeking help from ACORN in negotiating with Countrywide over better loan terms.

Morgan-Coleman was anything but a subprime borrower when she bought a house for $82,000 in 2003. Her 30-year mortgage for $72,000 had a fixed interest rate of 5.375 percent, she said yesterday.

But coming off a divorce and starting over as a single mother with a middle-class lifestyle, she ran up a chunk of credit-card debt.

Meanwhile, Countrywide sent her a stream of offers for a home equity loan to consolidate her credit-card debt. She said that every time she got on the phone to confirm a payment, Countrywide customer-service representatives badgered her about getting a second loan. In 2005, she relented, taking out a $15,000 home-equity loan. "I thought it was going to save me money in the long run," she said.

But she did not know that she was only paying interest on the home-equity loan and that the interest rate was climbing, until it reached the 15 percent to 16 percent range, about the same as the credit-card rate.

A Countrywide spokesman could not be reached for comment on the terms of Morgan-Coleman's loan.

The monthly interest payment has gone from $80 to $150, and she can't keep up, especially after losing her job in retail a year ago and going to school to become a medical technician.

Morgan-Coleman said she was current on her first mortgage, which costs $550 a month, including taxes and insurance. But the lender is threatening to foreclose because she's been months behind on the second mortgage.

"Right now, I don't even consider myself middle class," said Morgan-Coleman, who has also fallen behind on other bills.

"It's horrible when you get bamboozled by these big companies who just want to make money," she said. "It's just not right. It really, really angers me."

Taylor, the Mount Airy woman whose loan was modified by Countrywide, is happy now. "I'm settled," said Taylor, who had refinanced in 2005 to pay her grandmother's nursing-home expenses and to finance home repairs.

But John Dodds, director the group that took Taylor to Cleveland, pointed out that Taylor would pay only interest for four years.

"Basically, she has no equity in her property," Dodds said. That's after 30 years in the house and a succession of four mortgages, including the modification.

Dodds was pleased that Countrywide allowed Taylor to stay in her house, he said, but "they could have been a little nicer about it."

Countrywide sold to Bank of America. Stocks plunge on woes in financial sector.

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