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Countrywide hatches plan to lure assets

Countrywide Investments, the Cincinnati-based adviser to the Countrywide Funds, has a novel plan for building assets in its $1 billion fund family.

This month, Countrywide began offering to customers who refinance their homes with its parent company, automatic investment in its mutual funds, of the difference between their old and new mortgage payments.

The new program, called InvestPlus, seeks to capitalize on some of the lowest mortgage interest rates available in years, said William Hortz, executive vice president and director of sales at Countrywide Investments. Rock bottom rates are causing many homeowners with high interest rate loans to seek refinancing. Hortz says he believes the program is unique.

Countrywide's mortgage refinancing arrangement allows homeowners, who refinance with Countrywide Credit Industries, to automatically invest their newly realized monthly mortgage savings in any of Countrywide's 17 proprietary funds. Homeowners-turned-investors receive one monthly statement combining mortgage information and fund account updates. The program has been tested over the last several months and is now being formally introduced to all Countrywide customers.

Homeowners accustomed to writing higher monthly mortgage checks can continue doing just what they have been doing, said Hortz. Countrywide will automatically shift the monthly mortgage savings or any other specified amount into a mutual fund account of the homeowner's choice.

The firm is targeting novice investors who may be homeowners but not yet savers, said Hortz.

Hortz believes this arrangement will appeal to individuals who are not already Countrywide customers- and even those who could find better refinancing rates with other companies. Countrywide hopes to use the novel enhanced mortgage program to distinguish itself from other financial services companies and hone its identity as a broader service provider.

To further market the InvestPlus program, new educational materials are being developed to help first-time do-it-yourself investors make investment decisions. A quarterly educational newsletter is planned, as is a revised website that will be introduced later this year.