Countrywide in Trouble: how will this affect you?

By
Mortgage and Lending with Joe Brady - World Wide Credit Corporation

    Countrywide is in serious trouble! As the largest U.S. mortgage lender by volume, their problem is your problem. You may ask yourself how Countrywide’s problems may impact you, and why are they in trouble? By now everyone should be aware of the mortgage problems that have escalated recently. Things have not looked good as many lenders have gone belly up because of what began as a Wall Street ‘risk-adjustment.’ Initially this affected only the subprime mortgages, but then seeped through the whole industry, resulting in the Fed’s action to liquefy markets by injecting billions of dollars. This is particularly eminent now as Countrywide had to draw down $11.5 billion in order to increase their liquidity. On top of that, Merrill Lynch just downgraded Countrywide and their stock has plummeted roughly 30% over the past week. Not a good sign for the leader in the mortgage industry. But how does this affect you?

    Well, Countrywide is to the mortgage industry as Coke and Pepsi would be to the soft drink industry. If you are craving that Coke or Pepsi product and they are having major liquidity problems, as Countrywide is, you may see your favorite products (maybe Sprite or Mountain Dew) disappear. It is the same with Countrywide, except their products consist of an assortment of loan programs. Due to these troubles, you may not be able to get that program you qualified for, a much more serious consequence as you may not be able to receive funding now. They are cutting those programs which are risky or are not backed by a select few. The next logical question may be which programs are being cut? I love my Mountain Dew and wouldn’t want to see that gone. Countrywide is now focusing solely on Fannie Mae and Freddie Mac loans, leaving those who do not meet the guidelines out of luck. They are expecting that in the coming months, 90% of loans issued will be sold to Fannie Mae, Freddie Mac, or meet the criteria of Countrywide Bank.

    So does this affect you? Yes it does. It affects the economy, markets, and anyone seeking a loan. However, there is solace somewhere in this mess. For those that are in search of traditional financing and have the money to do so will not be affected, unlike those looking for 90-100% financing. Now more than ever a mortgage professional is needed to help you find the right program. So keep your eye on the market and don’t panic, yet…

 *Article cross-posted on www.joseph-brady.com

 

Comments (12)

Christopher Ohlsen
Credit Werx, LLC. - Malone, NY
Good observations, though I'm not sure that I agree with the analogy. CW wasn't that big until the subprime refi wave hit. Their niche lending products are in large part what got us into this mess. We were fine before CW became the giant that it became and we will be better off post CW dominance in the market. I don't want to sound like a lunatic here, but I hope CW does go under. I hope that they either go under or that they begin embracing more responible lending practices.
Mar 11, 2008 02:36 AM
Anonymous
Steve Reisiger

 

Our GOVERNMENT is responsible for the lax lending practices they practically forced on the industry under the Carter administration back in 1977.  I forget the name of the legislation, but it made lenders (under threat of penaltys) lend to people who may not have had to show proof of income, a good credit history etc...  

So, some lenders did wrong things but the majority did not. They just did their best to protect themselves and make a profit under the rules dictated by the GOVERNMENT.

Bottom line is, if the dang GOVERNMENT would get out of the way in the lending and other industries, our economy would be booming. Private industry does a pretty good job of policing itself in a true free market. GOVERNMENT regulation is choking this country to death. 

 

May 07, 2008 10:17 AM
#2
Anonymous
casscubs

I am thankful that they are having huge problems. As my dad said in the past "what goes around comes around". They had bought my loan from another company I had started out with on my house. I admit it was a loan that 2 years later would become adjustable, and was told at first to preapre for it. My credit wasn't that great but we were determined to build up my credit, and save some money to prepare a new loan with a fixed rate. Then came Countrywide. I started having problems being able to communicate with them and got lousy time response. I then proceeded to ask about refinancing. They said "NO PROBLEM" and that it would be easy. I won't be able to dilvulge all the details but I knew it is anything but easy. With Countrywide it was hell. I was not even really given the opportunity to make it work and it was just a terrible experience. I went through another mortgage company and it was quick and easy. I was happy to get ride of them. I hope the people that I had to deal with loses their jobs, and that Countrywide bcomes a third rate facility. Even more so, I hope that Bank of America kick those Countrywide losers out. Now I have said my piece and I have peace.

Jun 18, 2008 01:20 PM
#3
Anonymous
Anonymous

I have a loan with Countrywide.  Five and a half years ago when I first got the loan, they told me that I had a 5 year pre-payament penalty but if I waited a year and I were to refinance with them, they would waive the penalty.  Of course, they lied.  Naive as I was, I did not get it in writing and I had to wait the 5 years to sell or refinance.  In addition to a 5 years penalty verses the normal 3 years, the penalty amount did not go down as time passed.  If I were to pay off the loan 1 day before the deadline, I would still be charged the entire amount for the 5 years.  I was desparate to refinance.  I had a 9.5% loan when loans were at 5%-6%.  They took advantage of the situation and made a killing.  It's a shame to see them go under, but they were very unscrupulous. 

Jul 14, 2008 02:10 AM
#4
Anonymous
The lone satisfied customer???

I have a loan with CW and they were great from the start, it was fast, easy, no income verification, everything went smoothly, it was a construction loan that automatically converted to a 30 year fixed. I was even able to do a one time pay down towards the principal and they reammortized the loan for a small fee. I just refinanced for over a point lower interest, they called and told me about the rates dropping and I jumped on it, we're now at 5.75% and the whole process was complete in under 2 weeks, I know quite a few other people who have had CW loans and they were very satisfied. There is one person I know however, who took a phone call from a CW agent who talked them into a refinance with an adjustable rate...they almost lost their house and are now stuck with an AR currently over 8%. The public needs to do the research before they sign on the line, adjustable rate mortgages should be against the law, the banks make enough money on a fixed rate!!!

Sep 27, 2008 03:08 PM
#5
Anonymous
unsatisfied

I know a family that is dealing with countrywide right now on a special forbearence because they got behind on their mortage due to illness,they started the process on 090308 it was suppossed to take at the most 30 days to see if they were qualified they are working with jesse hoar,They have called on numorous times to talk to her to find out what was going on with their loan and to find out how they could save thier house,and have been told by several different people that have answered the phone that they would email jesse to call them,and that the forbearence should of been done by 092408,and that they had checked the computor and there was nothing there and that they would email her to call them.On oct 6 08 they got a letter from jesse hoar at countrywide that she had been unable to contact them,I found that very amusing since they had been trying to get in touch with her since092408,they faxed her the info she wanted on 100608 and asked her to call,she did not,they called on 100708 and still she could not be found,they faxed her a letter on 100708 and asked her to contact them still she has not,they called today100808 still she could not be found .So I would say with people like that working for countrywide that cant do their job its no wonder that they are in trouble.

Oct 08, 2008 12:02 PM
#6
Anonymous
not happy with countrywide

I bought my house in 2004 and not I am getting ready to lose it to foreclosure. I was making monthly payments to CW and then one day when making a payment the lady decides to tell me that I was $3500 behind. After months of making my payments no one else bothered to tell me this. I am not sure what went wrong but I feel like CW screwed me royally but there is nothing I can do. They did decide to do a modification but I cannot afford it. I was paying $500 a month and they raised it to $870 a month. I do not have this kind of money. I would not recommend CW to anyone. I never do get the same answer from them and they did not help me at all!!! very disappointed

Jan 31, 2009 03:20 PM
#7
Anonymous
Countrywide or bust

Think twice before using Countrywide. They are not what they say they are. They tell you one thing and do another. It took me talking to four different people one day to get an answer but yet not one of the answers were the same. If you are going to purchase a home...find someone other than CW. My experience with them is not good at all.

Jan 31, 2009 03:24 PM
#8
Anonymous
AA

Countrywide sucks!!!  I have been trying for months to work with them since I am unemployed and my husband is the only one working.  I asked if there was a way to lower my interest rate down to 5 % or to extend the loan to another 5-10 years to reduce the payment.  If that wasn't working then could I deferred the payment for at least a month or two.  Of course, they refused to work with us.  They only offered to have my late payment divided into 9 months plus the interest we would have to pay for those nine months which in turned it was going to increase our mortgage payment by $500.  Now how is that going to help us if we were being asked to increase our monthly payments when I am trying to find a way to reduce it keep our home.  I do hope President Obama forces them to lower everyones interests rate and extend their loans.  I wouldjnot recommend to anyone to apply through them.  Bank of America is just at fault because they are the ones who bought Countrywide. 

Feb 17, 2009 08:16 AM
#9
Anonymous
Phyllis halliday

I lost my job (as a Mortgage Loan Closer) and contacted CountryWide to see if I could refinance to lower my payment.  The loan officer said I could do the FastTrack loan and eagerly took my non-refundable $380.00 fee.  Three months later I havent heard back from them.  My phone call, which of course every one passed the buck, revealed I was denied approval for a new loan. How nice of them to contact me and let me know!  By this time I cannot make my mortgage payments.  I call again to get help.  What a joke!  No help available...." just stop making your payments" is what I got out of it.  Absolutely a waste of time and $380.

Apr 02, 2009 07:10 AM
#10
Anonymous
TG

My house flooded in Hurricane Ike. My insurance company, nor FEMA would assist in any way after. I have a small child, and we had to buy beds, everything, but we managed to get by. Countrywide let me miss a Mortgage payment in October, then referred me to the Workout Program, and refused to accept any payments until the Workout Program sent me a letter. weeks turned into months and I recorded all calls to them as they told me it was being reviewed. By January, they told me they accidnly did not send it over to the Workout groug. By then, I was buried in all sorts of charges. THey foreclosed on me last week. THey are a bunch of rude, sorry, assholes and they should be ARRESTED!!!!

Jun 09, 2009 10:50 AM
#11
Anonymous
Kathie Thompson

Our investment broker put thousands of dollars worth of expired bond money into Countrywide last Fall.  Now, it is all gone.  On a radio show today, I heard investment counselors saying that Countrywide made loans to anyone, no questions asked.  To people who could not validate income and spent money on drugs.  Disgusting!!! Our retirement money is  dwindling away after it took a huge hit.  I know we're not alone.  Weren't some people aware of what was happening and took out their investments????

kt

Jul 20, 2009 06:01 PM
#12