Mortgage Mess

The Mortgage Mess and You Countrywide, the mortgage mess and you As questions swirl around the nation's largest provider of home loans, we answer common questions that consumers have about the lending crisis Latest Market Update August 22, 2007 -- 16:20 ET [BRIEFING.COM] Stocks rallied Wednesday as investors embraced everything from a fresh round of much needed M&A news to increased hopes of a Fed rate cut and the belief that stocks remain oversold at current levels. Absent any notable... More advertisement Article Tools E-mail to a friendTools IndexPrint-friendly versionSite MapDiscuss in a Message BoardArticle Index Find a new home or apartment Existing Homes - REALTOR.com© New Homes - Move.com™ Foreclosures - RealtyTrac.com™ Rentals - Move.com™ Price Range: $0$10,000$20,000$30,000$40,000$45,000$50,000$55,000$60,000$70,000$75,000$100,000$125,000$150,000$175,000$200,000$225,000$250,000$275,000$300,000$325,000$350,000$400,000$450,000$500,000$550,000$600,000$650,000$700,000$750,000$800,000$850,000$900,000$1,000,000$1,250,000$1,500,000$1,750,000$2,000,000$2,250,000$2,500,000$2,750,000$3,000,000$3,500,000$4,000,000$4,500,000$5,000,000$6,000,000$8,000,000$10,000,000 – $10,000$20,000$30,000$40,000$45,000$50,000$55,000$60,000$70,000$75,000$100,000$125,000$150,000$175,000$200,000$225,000$250,000$275,000$300,000$325,000$350,000$400,000$450,000$500,000$550,000$600,000$650,000$700,000$750,000$800,000$850,000$900,000$1,000,000$1,250,000$1,500,000$1,750,000$2,000,000$2,250,000$2,500,000$2,750,000$3,000,000$3,500,000$4,000,000$4,500,000$5,000,000$6,000,000$8,000,000$10,000,000No Maximum Select a StateAlabamaAlaskaArizonaArkansasCaliforniaColoradoConnecticutDelawareDistrict of ColumbiaFloridaGeorgiaHawaiiIdahoIllinoisIndianaIowaKansasKentuckyLouisianaMaineMarylandMassachusettsMichiganMinnesotaMississippiMissouriMontanaNebraskaNevadaNew HampshireNew JerseyNew MexicoNew YorkNorth CarolinaNorth DakotaOhioOklahomaOregonPennsylvaniaPuerto RicoRhode IslandSouth CarolinaSouth DakotaTennesseeTexasUtahVermontVirginiaWashingtonWest VirginiaWisconsinWyoming Or Senior LivingHome PlansManufactured HomesSenior LivingLearn More.Senior LivingHome Plans By Bankrate.com It has been a difficult year for mortgage lenders. The subprime market went into a tailspin in February and March. A classic credit squeeze developed in late July, brought on by fears that jumbo and nontraditional mortgages might end up having higher-than-expected delinquency rates. Investors in mortgage-backed securities suddenly realized they didn't know exactly how much their investments were worth -- but they suspected that they had overpaid. The nation's biggest mortgage lender, Countrywide Financial (CFC, news, msgs), was caught up in the uncertainty. An analyst for Merrill Lynch (MER, news, msgs) on Aug. 15 wrote that Countrywide might face so much financial pressure that it might lead to "an effective insolvency." (On Monday, the Wall Street Journal reported that Countrywide had begun laying off staff, citing an internal e-mail sent Friday to employees of a Countrywide division that handles many Alt-A customers, who typically cannot qualify for a traditional prime-rate loan. The company employs 61,000 people.) "If liquidations occur in a weak market, then it is possible for Countrywide to go bankrupt," wrote Merrill Lynch analyst Kenneth Bruce. When the words "Countrywide" and "bankrupt" appear in the same sentence -- even as a hypothetical -- people take notice. (Countrywide didn't respond to a request for comment.) Decision Center: Getting the right home loan Here are some common questions consumers have, and some answers. Why should I care about Countrywide's fate? Countrywide is the nation's biggest mortgage lender. It funded $39 billion in mortgage loans in July. It's also the largest or next-largest loan servicer. The servicer is the company you send your monthly mortgage payment to. It then distributes the money to pay the principal, interest, taxes and insurance. Americans owe about $13 trillion in mortgages, and Countrywide services about $1.4 trillion of that. So a significant percentage of mortgage-paying homeowners send a check to Countrywide every month.