Is countrywide serious...

Great Blog about CountryWide!  Its unbelievable that people still can take a loss 1.2billion and shift the focus on the future, and make money with the stock! 

You have to love Wall Street brandon. Let's not forget to make the shareholders feel good.

Brandon..I hate Countrywide....they are known as the "C" word around my company.....and I barred them about 3 years ago from doing business with my company.....what you wrote doesn't surprise me.

I know that we can and will deal with these losses. Its kinda like taking a big breath and trying to hold it . You will breathe if you can.You must; There is not a choice. Years ago, the depression era survivors were wary of banks that could call loans without due cause. Literally thousands and thousands  of homes were lost , and thats where the pay off the mortgage mentality came in.

 Its only in the last ten-fifteen years that the lending rules continued to loosen to create this mess. If we look at the amounts of billions of money made over the last 10 years in mortgages and fees and cost average it against the present day situation, you will find that the actual lenders are still in a plus situation.

 And, with the stock market spreading the pain across millions of OTHER investors, and then realize that the losses are only in the face value of the assets. The real profits are realized in the 3-500 percent realized in the amortization of the loan. The mess we are living in is going to result in a bottoming point of prices and a re standardization of the lending process. I used to make a good living on buying up repossessed homes and abandoned homes. Back then there were a large percentage of people who could not meet the lending standards, and those people got involved in creative,owner financing.The moral-of the story is that because of the mess at that time, we were able to help over 100 people purchase a home. That was just my little company, I am sure this was repeated thousands of times across the country.

The new home-buyers of that group, many of which I still see to this day, took advantage of the opportunity and built up their credit and equity.  The ones that held on saw 2-300% increases in value over the next 10-15 years. I would be willing to bet, that the ones who came into home ownership that way never gave up their position in the home again to the mail box full of home equity loan offers.

I may be off base a bit on this comment, but I have been doing this for a long time, and know that out of this will be a place for deal making and opportunity for the home-buyers who cannot fit into the lender profile. The homes WILL NOT go to waste. Someone will be made a deal, and move in. It always happens, and when the time is right, the local economy will be forced to take a breath

Great points, Some people find it hard to fathom the idea that the #1 lender could have this trouble. This just shows us that too much of any one thing could catch up to you, and indeed it has....watch out below, stock falling hard!

Thanks for the subject Brandon!

I watched the financials....I heard it too.  I guess I will fall in line with you Brandon....the fat lady isn't singing!  They may make paper money based on accounting changes but you can't spend it!  Nice post Brandon.

Well Brandon the jury is still out on this one. Only time and customer confidence can regulate their fate.

Watch Bank of America make a play on Countrywide, a merger or take over is very likely. Why? Countrwide is making big money on loan servicing and B of A is licking its chops in anticipation.

 

It's hard not to hate Countrywide.  The Keys were hit hard by Rita & Wilma.  Bush said to call you lender and explain your situation and you could skip up to 3 payments.  Countrywide told everone that I know "ok" and then on the 4th month demanded all of the money or threatened to start foreclosure.  Then they said if they couldn't pay all 3 months back immediately that they could increase their payment by $500 a month to make up the difference.  They REFUSED to let people add the 3 months to the back end of their loan.  So many people were hurt and they couldn't care less.  Countrywide is not a company that cares about people.  At the same time the insurance industry doubled and then tripled rates and our property taxes doubled.  Thank goodness we have a group called FIRM in the Keys that fought to get our insurance rates lowered.  They saved the Keys.

I always recommend buyers try any other source first.  I had one client give Countrywide 3 chances.  All three times her payment ended up being hundreds of dollars more than they told her it would be.  I think it was $1,200 higher on the last property she bought that was a guest house.  They gave her a great quote and monthly payment so that she would use Countrywide.  I kept telling her to make sure that she CONFIRMS that the payment included taxes and insurance since I had heard the complaint from so many people before.  She got the shaft 3 times.  She liked the mortgage broker but she wishes Countrywide would go out of business.

Oh, one more thing!  They recorded late payments on all the payments until the money was paid back.  When someone started the payments on the 4th month they showed that 4th payment as a late 1st payment.  Late payments were not supposed to be recorded.  Credit scores were destroyed.  And of course you had to talk to 35 people every time they had a question and they were all rude and nasty and treated the hurricane victims like they were dirt bags.

Brandon,

Countrywide probably is too big of a lender to be allowed to go under. That would badly shake the confidence in the financial markets. Someone is going to buy it outright or the government will step in.

Brandon - You actually left out three zeros in your figure as well!  $12,000,000,000.00 is a ton-o-money and it is a shame that we're going to to see so many more homes coming back to the banks.  Unfortunately it seems that many of our large banks haven't yet figured out how to properly mitigate the problem and I think you're right that we're going to see more nastiness in next year.

Hang on tight everyone!

B of A already bought a 15% equity interest in Countrywide at the end of this past summer. They will gobble up the financially strapped giant.