Countrywide Financial Corp. announced Friday that it’s working with a community group that has been critical of its efforts to engage in workouts with troubled borrowers on a foreclosure prevention initiative that it hopes to launch in early 2008.

Countrywide and the Association of Community Organizations for Reform Now (ACORN) “anticipate final release of the groundbreaking provisions of the home retention initiative soon after the new year,” Countrywide said in a statement Friday.

ACORN organized protests in October at Countrywide offices in major U.S. cities including New York, Miami, Baltimore, Cleveland and San Jose, saying the company was not doing enough to prevent foreclosures.

ACORN has pressed Countrywide to modify the loan terms of troubled borrowers, converting adjustable-rate loans to fixed-rate mortgages for those who would not be able to afford interest-rate resets.

“It’s not enough for Countrywide to offer unaffordable payment plans and short-term modifications that will do nothing but force homeowners to limp along, hoping for a quick recovery in the housing market,” ACORN National President Maude Hurd said in a press release at the time.

Unions representing hotel and textile workers have also launched a boycott of Countrywide’s bank offices, urging members not to deposit their savings with the company because of its alleged mistreatment of borrowers.

ACORN spokesman Charles Jackson told Inman News that moving borrowers into fixed-rate loans will be one of the main points of the initiative now being developed.

In announcing the initiative with ACORN, Countrywide said it modified the terms of 12,565 loans in November, compared with about 800 in the same month a year ago.

So far this year, Countrywide said it has prevented 69,171 foreclosures through efforts that included modifying the terms of 45,735 loans, creating long-term prepayment plans on 11,148 loans, and by showing forbearance on 4,191 loans. In addition, Countrywide said it has allowed 6,880 short sales and 1,029 deeds-in-lieu of foreclosure, in which borrowers are absolved of any debt not covered by the sale of their home.

It’s not the first time Countrywide and ACORN have collaborated. Countrywide has provided financial support for ACORN projects including a Housing HELP Hotline, (888) 409-3557, and chipped in $100,000 toward ACORN Housing Corp.’s efforts to help rebuild and repair hurricane-damaged homes in the New Orleans area, and assist victims in relocating and paying off mortgages.

ACORN also participated with lenders in an effort organized by Senate Banking Committee Chairman Sen. Chris Dodd, D-Conn., to draft principles for engaging in workouts with troubled borrowers. The principles, announced in May, included making early contact with borrowers facing interest-rate resets and modifying loan terms where possible to prevent defaults and foreclosures.

The Bush administration announced Dec. 6 that it hopes loan servicers participating in its HOPE NOW initiative will refinance or freeze the interest rates of up to 1.2 million subprime borrowers who face interest rate resets between Jan. 1, 2008, and July 31, 2010. The Center for Responsible Lending has estimated that the plan may only help about 145,000 borrowers.

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