LOS ANGELES - Countrywide Financial Corp., the nation's largest mortgage lender, said Tuesday that it will begin calling borrowers to offer refinancing or modifications on $16 billion in loans with interest rates set to adjust by the end of 2008.

But as defaults and foreclosures snowball, the mortgage industry is under increasing pressure to do even more to help financially strapped borrowers hang on to their homes.

'People are talking about it, saying it might be necessary, but there's not a lot of it going on,' said Guy Cecala, publisher of Inside Mortgage Finance, an independent trade publication.

The Mortgage Bankers Association is surveying its members to determine how many mortgages have been modified in recent months.

Moody's Investors Service recently surveyed 16 mortgage servicers that accounted for 80 percent of the market for subprime loans made to borrowers with shaky credit histories.

It found that most of those companies had modified only about 1 percent of loans with interest rates that reset in the first half of this year.

The bankers association said the survey is flawed because it didn't include other ways that borrowers are being helped, including temporary reductions of monthly payments or spreading delinquent amounts over future payments.

'It is important to understand that the loan modification is only one means of helping a borrower who is behind on their payments,' said Steve O'Connor, the association's senior vice president.

Countrywide Helps 24% In Trouble

So far this year, Calabasas-based Countrywide said it has completed about 20,000 loan modifications - a figure that represents less than 5 percent of the more than 500,000 loans the lender reports were behind in payments as of last month.

The figure amounts to about 24 percent of the roughly 82,000 loans the company said were in foreclosure.

Countrywide said the statistics can be misleading.

'The number is not small when you sort down to the people who are seriously in trouble,' said Steve Bailey, CEO of loan administration at Countrywide, which has 8.9 million loans valued at $1.45 trillion.

On Tuesday, the company said it would discuss possible loan changes with borrowers who are current on loans but face pending interest rate resets. The lender said it intends to refinance about $10 billion in loans and modify another $4 billion.

It also plans to contact holders of loans totaling some $2.2 billion who are late on their loans and struggling because of recent rate resets.

Countrywide said it has helped more than 40,000 borrowers and would reach out to 82,000 more to provide some kind of relief.

Countrywide shares fell 63 cents, or 4.02 percent, to $15.05. The shares have traded in a 52-week range of $14.40 to $45.26.

Many lenders only recently began ramping up their loss mitigation departments after years when the booming housing market let many borrowers who fell behind on mortgages sell their homes for more than the value of their mortgage.

Another problem has been investors balking at interest rate cuts that could eat into their profits.

This year, Seattle-based Washington Mutual, with a mortgage servicing portfolio valued at $713.3 billion, said it would refinance up to $2 billion in subprime loans to discounted fixed-rate loans for borrowers who are current on payments.

Wells Fargo & Co., with a mortgage servicing portfolio of $1.41 trillion at the end of June, declined to say how many home loans it has modified.

The San Francisco-based bank reported that less than 4.5 percent of its loans were delinquent at the end of June, and 0.56 percent had entered foreclosure.

'We work hard to keep customers in their homes, whenever possible, when they experience financial difficulties,' bank spokesman Jason Menke said in a prepared statement.

Homeowner Doesn't See Help

Despite industry efforts, relief remains out of reach for many borrowers such as Carlos Ortiz, who says he is on the verge of losing the four-bedroom home he bought for $580,000 in suburban Rancho Cucamonga, east of Los Angeles.

Like other buyers at the height of the housing boom, he got a loan that kept his monthly payments low for two years and counted on being able to refinance before the rate adjusted sharply higher.

When he didn't qualify for a new loan, he tried to get his mortgage servicer to restructure his existing one.

'I told them I cannot afford it, you have to help me to refinance or modify my loan,' Ortiz said. 'They don't want to work with me.'

The mortgage industry will likely face growing pressure to alter loans in the coming months, as some 2 million adjustable-rate loans begin resetting to higher monthly payments.

Treasury Secretary Henry Paulson has called for Congress and mortgage lenders to move more quickly.

Meanwhile, Sheila Bair, chairman of the Federal Deposit Insurance Corp., suggested that mortgage service companies consider doing broad conversions of adjustable-rate loans to fixed-rate loans if the borrowers are current on their payments and living in the homes.