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Juicy Gossip On Countrywide!

By R. B. "Bob" Mitchell - Loan Officer Raleigh/Durham

Mortgage and Lending with Bank of England (NMLS#418481) NMLS# 1046286

August 15, 2007 05:34 AM

Recently there has been a lot of scuttlebutt going around about the financial solvency of Countrywide Home Loans, Countrywide Crashing and Burning? the country's largest mortgage lender. Well, I could understand the concern. Heck, now isn't a good time for ANY lender, but I believed Countrywide's CEO, Angelo Mazilo, when he spoke out in an attempt to calm the concerns.

In his comments he assured everyone that Countrywide had enough cash to be able to withstand the current market turmoil and that Countrywide might even benefit from the current conditions with so many other mortgage companies failing.

Then this morning I read a piece on Bloomberg.com that reported that Merrill Lynch had down Countrywide going belly up? graded Countrywide from a buy to a sell based upon fears that Countrywide was facing "effective insolvency" and might be forced into bankruptcy. This could be huge!

What will happen to the mortgage markets if Countrywide does go belly up? So far this is only one analyst with one brokerage house, but that brokerage house is Merrill Lynch and while they might not be the company that boasts that when they talk, that people listen, but I would think that this announcement has got other brokerages looking at their positions on Countrywide.

Anyway, this might all simply be speculation, but it might also be the first ripples of another Enron type of corporate meltdown. Interesting, if nothing else.

So, what are your thoughts? Is Countrywide too big to fail? If they do, will the government step in to bail them out? If the government does step in to bail them out, is this fair to the other companies that didn't get a helping hand? Let me know what you think!

Bob Mitchell

ValueList Real Estate Services, Inc.

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Kate Bourland

Marketing with Kate - Redding, CA

Onlilne Marketing Mobile Marketing

I think that anything is possible, but if Countrywide folds, the market is in for a serious contraction. I remain impressed by Countrywide's leadership to date. Only time will tell. Interesting comment David - as a devils advocate, what benefit does it do to Merrill Lynch for Countrywide to go under? It will hurt everyone!

Aug 15, 2007 05:58 AM

R. B. "Bob" Mitchell - Loan Officer Raleigh/Durham

Bank of England (NMLS#418481) - Raleigh, NC

Bob Mitchell (NMLS#1046286)

David: I honestly don't know if there is anything to this or not. I don't agree with you that Merrill Lynch is doing this because they have a mortgage division though. Up until this point they had Countrywide as a "buy". I can tell you that I have noticed that Countrywide has been acting strange here recently. If you didn't read it, check out my posting on Countrywide reneging on a loan commitment that they had issued me.

John: We'll see. I never did a tremendous amount of business with them because of what I called the "double secret Countrywide rules", but other than that, I didn't notice anything out of the ordinary with them. Well, that's not 100% true, they have acted flaky from time to time over the years, but that was just the way that they were!

Bob Mitchell

ValueList Real Estate Services, Inc.

Aug 15, 2007 06:08 AM

Esko Kiuru

Bethesda, MD

Bob,

There has been talk that Countrywide is having difficulties. Even the CEO admits to some of that. Should they appear to go under, my bet is that they will be bailed out. Their size makes that decision easy for the Feds. The size by itself is one thing, but more importantly the perception of the largest U.S. lender going down is very bad for the worldwide financial systems.

Aug 15, 2007 06:26 AM

R. B. "Bob" Mitchell - Loan Officer Raleigh/Durham

Bank of England (NMLS#418481) - Raleigh, NC

Bob Mitchell (NMLS#1046286)

Seth: Thanks for the comment!

Mario: We'll see what happens. Even if Countrywide goes into bankruptcy, I'm sure that they will emerge and not go away totally.

Kate: I think that you are right, if they go into bankruptcy, I'm sure that the press will be all over it and we'll be in for another round of negative press. Also, I don't think that Merrill Lynch is taking this action in order to benefit their mortgage lending division. Hell, everybody seems to have a mortgage lending division these days, maybe that's part of the problem!

Bob Mitchell

ValueList Real Estate Services, Inc.

Aug 15, 2007 06:29 AM

R. B. "Bob" Mitchell - Loan Officer Raleigh/Durham

Bank of England (NMLS#418481) - Raleigh, NC

Bob Mitchell (NMLS#1046286)

Randy: You may be right. or Maybe Esko is right. I honestly don't know if the government will step in to bail them out. We'll have to wait and see.

Bob Mitchell

ValueList Real Estate Services, Inc.

Aug 15, 2007 06:32 AM

David Slavin

Keller Williams Premier - Katy, TX

CDPE, ABR, SRES Keller Williams Premier

The bigger they are the harder they fall!

Aug 15, 2007 07:39 AM

Chris Hendricks

Walnut Creek, CA

With Merrill I'd take the 'do what they do, not what they say' approach toward evaluating Countrywide. Saying 'sell' tells the retail investor what to do. But if they're moving their managed portfolio clients out, I'd pay attention.

Aug 15, 2007 07:52 AM

Bryant Tutas

Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL

Selling Florida one home at a time

Bob I just don't know. But if they did it would be huge set back for the mortgage industry and the economy. I guess we just have to wait and see.

Aug 15, 2007 08:06 AM

Bruce Bourgault, Vice President, Mpro

Central Pacific Homeloans - Honolulu, HI

Bob -- Back in the late 80's Angelo Mozilo came out here to speak to our State Mortgage Bankers convention. I played in his 4 some in the morning and thought what an arrogant son of a gun he was. That night he addressed our Convention as the key note speaker and talked about eliminating loan officers all together. Need less to say that was not a popular speech. I do feel sorry for the great people who work for them and the buyers sellers and Realtors that will be affected if they fold. I won't weep much for him though. Aloha

Aug 15, 2007 09:00 AM

Bruce Bourgault, Vice President, Mpro

Central Pacific Homeloans - Honolulu, HI

Aug 15, 2007 09:00 AM

Bruce Bourgault, Vice President, Mpro

Central Pacific Homeloans - Honolulu, HI

Aug 15, 2007 09:00 AM

Nima Rezvan CT Lender CT Senior Mortgage Broker

Nima Rezvan Prosper First Funding Corporation NMLS#110681 - Fairfield, CT

First Time Home Buyer Expert - CT FHA Loans - FHA

Dear Real Estate Professionals,

News about the current state of the mortgage industry can be unsettling for those of us who make our living in this business. This challenging time has brought about greater than usual media coverage of our sector, including coverage about Countrywide.

With all the information that's being distributed, I wanted to take a moment to personally update you on what's going on at Countrywide.

• We have supplemented our existing liquidity options by infusing an additional $11.5 billion in to our operation through a syndicate of 40 of the world's largest banks. More than 70 percent of this facility has an existing term of greater than four years.

• We announced our strategy to fund a significant portion of loans through Countrywide Bank, which has approximately $100 billion in assets. Today, we fund approximately 70 percent of our loans through Countrywide Bank, and expect that nearly all of our loan volume will be funded through the bank by the end of September.

• We expect that approximately 90 percent of the loans we originate will be eligible for funding through Countrywide Bank or the Government Sponsored Entities (Fannie Mae, Freddie Mac).

• Just this week, we increased our product options for fully documented Jumbo loans.

I want to let you know that while this industry turmoil may continue for some time, Countrywide is here to assist you in and meet the home loan needs of your customers.

While the current industry news can be unsettling, know that I am here, backed by Countrywide, to meet your mortgage lending needs. Feel free to contact me directly by phone or email.

Sincerely,

Nima Rezvan

Home Loan Consultant

Countrywide Home Loans

Aug 17, 2007 04:53 AM

R. B. "Bob" Mitchell - Loan Officer Raleigh/Durham

Bank of England (NMLS#418481) - Raleigh, NC

Bob Mitchell (NMLS#1046286)

Nima: Thanks for the update. I had heard through the grapevine that Countrywide was going to file for bankruptcy protection sometime today. It's currently 12:39PM CST and I haven't read anything of the sort yet. Even if they do, I'm sure that the folks there are trying to figure out some way of keeping the doors open. Please know that while I'm not a giant fan of Countrywide's, I do feel for you and all of the other employees and their families while your company goes through this turmoil.

Bob Mitchell

ValueList Real Estate Services, Inc.

Aug 17, 2007 05:42 AM

John Popp

Charlotte, NC

I do not think Countrywide is in trouble. Countrywide has recently made a statement that they have the liquidity to survive and that they are here for the long run.

Aug 17, 2007 06:19 AM

R. B. "Bob" Mitchell - Loan Officer Raleigh/Durham

Bank of England (NMLS#418481) - Raleigh, NC

Bob Mitchell (NMLS#1046286)

John: We'll see. I didn't think that they were in trouble either, but they did seem to cut it close with this bail out by the banks.

Bob Mitchell

ValueList Real Estate Services, Inc.

Aug 17, 2007 06:32 AM

Bill Nazur

First Lending Solutions - Riverside, CA

Bob

Take a look at my blog titled, Active Rain Members Fuel the Media Fire....Countrywide is Failing!

It is a different perspective as I tend to work on fact, not rumors or innuendo. I believe you will enjoy it!

Aug 17, 2007 06:35 AM

Nima Rezvan CT Lender CT Senior Mortgage Broker

Nima Rezvan Prosper First Funding Corporation NMLS#110681 - Fairfield, CT

First Time Home Buyer Expert - CT FHA Loans - FHA

Bob,

I apologize for missing your call today as I was in the car driving my real estate broker business partner to his clients house for a home appointment. When you called, I was on the phone with a realtor business partner of mine. I was basically driving and had two real estate pros with me so I was unable to switch over and speak with you while I was driving. Thanks for your call.

Aug 17, 2007 12:01 PM

R. B. "Bob" Mitchell - Loan Officer Raleigh/Durham

Bank of England (NMLS#418481) - Raleigh, NC

Bob Mitchell (NMLS#1046286)

I don't know why somebody would post a comment with a link slamming Ray Vincent here....I don't know him and don't have an opinion on him or his business.....

Bob Mitchell

ValueList Real Estate Services, Inc.

Mar 13, 2008 02:02 PM

Rick Kellow

Cherry Creek Mortgage - West Bend, WI

FHA & Reverse Mortgage Expert

I've heard it said that Countrywide is too big to fall... but I can't help believing that I hearing "timber!!!" in the distance

Mar 13, 2008 09:50 PM

R. B. "Bob" Mitchell - Loan Officer Raleigh/Durham

Bank of England (NMLS#418481) - Raleigh, NC

Bob Mitchell (NMLS#1046286)

If they're in trouble with the law and it turns out that they did have their hand in the cookie jar, then you may be right. Especially, if the government is bailing out the Bear Sterns of the world.....We'll see???

Bob Mitchell

ValueList Real Estate Services, Inc.

Mar 14, 2008 02:36 AM