Countrywide and ACORN announced details of their agreement via teleconference. Several members of the local ACORN chapter gathered to listen in at Joe Ripplinger's house in south Minneapolis.
Guests arrive as music barks from the speakerphone sitting on Ripplinger's dining room table.
Ripplinger and a few of his visitors are some of the thousands of Countrywide customers who are looking for help. More on his situation in a minute.
Countrywide spokesman Rick Simon comes on the line to announce the partnership with ACORN. He says ACORN can help spread the word to their customers who don't know that Countrywide can help them stay in their homes.
"We're putting ourselves in a much better position to accomplish this goal, by agreeing to a system of practices and guidelines that will streamline determinations of options and solutions that may be available to a borrower in nearly any individual circumstance," Simon says.
Simon says some of the options include affordable repayment plans and loan modifications. In some instances, borrowers may qualify for an interest rate freeze or an interest rate reduction.
The plan also includes a five-year extension of the introductory or teaser rate that homeowners received when they first got their adjustable rate loan.
For Countrywide customer Joe Ripplinger, the situation is dire.
"It's really tough to keep up with the house payment and the rest of the bills I got," he says.
Ripplinger thought Countrywide was giving him a 30-year fixed-rate mortgage when he refinanced his home mortgage in 2006.
But they gave him an adjustable rate loan.
Ripplinger's house payments ballooned, from $174 when he first bought the house in 1975, to current payments of nearly $1,300 a month.
"I'm just hoping that Countrywide would sit down and talk to me, or to ACORN and me, and try to come up with a better situation than what I'm in now," Ripplinger says.
Like many older homeowners, Ripplinger is on a fixed income.
“These are Depression-era numbers, when you start talking about 8,000 to 9,000 foreclosures (a year.)”Prentiss Cox, U of M Law school
He receives Social Security disability payments, and says those payments total just over $1,000 a month.
His wife works a couple part-time jobs, but they can't keep up. If Countrywide doesn't restructure their loan, the Ripplingers will lose their home.
It's not clear whether Ripplinger will qualify for the measures outlined in the agreement with ACORN and Countrywide.
Minnesota ACORN spokesman Brandon Nesson says the agreement is a significant step toward helping people like Ripplinger.
"We don't want to oversell the agreement, either, and say it's going to help everybody and every situation," Nesson says. "It is a first step in working with the subprime industry -- getting them to come to the table and agree to an actual set of standards in writing, that they will abide by."
Nesson adds that ACORN is hoping to get other subprime lenders to participate in similar agreements.
But some are skeptical about the chances that other lenders will do so, like Prentiss Cox, associate professor of law at the University of Minnesota Law School.
"There's not a lot of evidence that, despite all the press releases, lenders are really willing to do anything but what they've always done," Cox says. "(They) say, 'You still owe me all the money, we can talk about maybe stretching out how you pay it back.' That isn't going to work for the vast majority of people in the foreclosure crisis."
Cox says if Countrywide is willing to rewrite loans and take some losses, then its actions may help slow the wave of foreclosures. But such relief can't come fast enough for thousands of Minnesota homeowners.
Cox says the number of foreclosures in Hennepin County last month nearly equalled the total number of sheriff sales in 2001.
"These are Depression-era numbers, when you start talking about 8,000 to 9,000 foreclosures, which is what this is going to project out at," Cox says.
Last year, there were more than 5,600 foreclosures in Hennepin County.