The Oracle of Omaha Saves the Day

By
Mortgage and Lending with Infinity Home Mortgage

     Countrywide in trouble? Not anymore! Credit lines shut off? They will soon be opened again as Wall Street rushes to invest in mortgage backed securities. Lenders still going out of business and people still losing their homes? Yes, but it won't halt investors anymore! Why? Because the Oracle of Omaha, Warren Buffett is considering buying a stake in Countrywide Financial. Is it set in stone? Not having Mr. Buffett's cell number to call and confirm, I could only speculate like everyone else, but it certainly is intriguing!

     Can Warren Buffett single-handedly cure the problems in the industry right now? Of course not, but he could certainly halt the overreaction and end the fear. If Warren Buffett invests in something, everyone else will, and should, too. This has been the case for decades. A lot of what's happening now is based on uncertainty. There is nothing more certain in the financial world than Warren Buffett and his company, Berkshire Hathaway.

     Lending has suffered from a lack of common sense for quite a while now. Buffett has always used common sense and sound financial's when deciding who to invest in. With stakes in Wells Fargo and Bank of America already, Buffett must feel very secure about the mortgage industry. If Buffett feels confident in the mortgage industry, Wall Street will as well. Will they open up the vaults and allow crazy spending again? Absolutely not, in fact, that would run counter to what Buffett believes in, but there will be money available for conforming lending.

     The fact is, the mortgage industry is a sound investment. Most people pay their mortgages and pay them on time. Lenders who can offer huge blocks of conforming mortgages and have large servicing portfolios are rare and valuable. Run correctly, they are cash cows-and Buffett knows this. Again, Buffett's involvement with Countrywide is only speculation, and it's kind of sad that the industry even needs his involvement. As for myself, I feel more secure placing loans with CWD Wholesale and I may buy a few shares of Countrywide with this months check. If it's good enough for the Oracle, it's good enough for me.

    

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Groups:
Pennsylvania Professionals
Tags:
countrywide
warren buffett
berkshire hathaway

Post a Comment
Spam prevention
Spam prevention
Show All Comments
Rainer
75,626
Ann Guy
NA - Allentown, PA
If I had a few extra dollars, I would invest in some CW stock. 
Aug 21, 2007 07:45 AM #1
Rainer
39,049
Michael Delp
Mortgage Pro - Telford, PA
My broker and I were discussing this at lunch today. You seemed to come to the same conclusions that we did. The Lenders that survive this "shakedown" or whatever you want to call it, will come out even stronger.
Aug 21, 2007 07:51 AM #2
Rainer
229,296
Sarah Cooper
Real Estate Shows - Hurricane, WV
I think you're right, Bill.  When I heard this on the news this morning, I felt better already.
Aug 21, 2007 08:08 AM #3
Rainer
119,269
Rob Robinson- Lehigh Valley PA
Bertrum Settlements (Title & Abstract) - Allentown, PA

I was always feeling OK about Countrywide.  There was certainly something to watch, but the doom and gloom bloggers I think were trying to simply drive the stock price down.  Fear sells, and the top gun bloggers are starting to get the power that many in AR claim "The Media" has.

Conspiracy theory?  Maybe. :^)

Aug 21, 2007 08:30 AM #4
Rainer
10,307
Bill Engleman
Infinity Home Mortgage - Nesquehoning, PA
Schuylkill and Carbon Countynulls FHA & USDA Specialist

Ann-I think that might be a wise investment.

Michael-Survival of the fittest

Sarah-How must it feel to be Warren Buffett? To have this settling affect on so many people!

Rob-I was feeling pretty good about Countrywide too. I couldn't imagine that there wouldn't be money available to them but the way things have been going... You're probably right that this was strongly influenced by a few gloom and doomers. Buffett just helps with investor confidence. The money should keep flowing even if he doesn't buy into Countrywide. The fact that he feels strongly about the mortgage business should ease all fears.

Aug 21, 2007 08:49 AM #5
Rainmaker
4,432,217
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

I have confidence in Countrywide .It is too large a company to go out of business.The stock has been  moving up gradually.

Aug 21, 2007 11:26 PM #6
Rainmaker
174,700
Ki Gray
Austin, TX
Austin Real Estate
I think if Buffett moves in not only will he bring money to Countrywide but he will bring investor confidence as well.
Aug 22, 2007 04:06 AM #7
Post a Comment
Spam prevention
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Rainer
10,307

Bill Engleman

Schuylkill and Carbon Countynulls FHA & USDA Specialist
Ask me a question
*
*
*
*
Spam prevention