You just know the scum at toxic lender Countrywide are using this "crisis" to their benefit - they're not "refinancing" these toxic loans because of any type of empathy toward the suckers, I mean customers, who have Countrywide toxic loans. Anyone want to bet they're:
1) Extending payment terms to 40 year and 50 years, thus keeping the payments the same or even lower
2) Putting in huge prepayment penalties
3) Pushing the reset out a year or two, but it'll still reset and at a worse rate down the road
4) Doing pretty much anything and everything they can to screw the homedebtor and protect their asses, while making it appear that they're doing good
A $1500 a month payment on a 30 year loan that's about to reset can easily become a $1500 a month payment on a 40 year loan. Preso! No problema! Meanwhile Angelo and Countrywide would be laughing to the bank at the new terms..
You know that Countrywide is up to dirty tricks because with this PR, they didn't announce any cost for the program. In other words, THERE IS NO COST FOR THE PROGRAM. Yet our lazy MSM failed to ask how this could be, or what the new terms would be.
A HOUSINGPANIC MESSAGE TO ALL CURRENT COUNTRYWIDE HOMEDEBTORS - THIS TIME READ YOUR DAMN MORTGAGE PAPERS AND DO THE MATH. DON'T LET THEM SCREW YOU AGAIN. IF IT SOUNDS TOO GOOD TO BE TRUE, IT'S TOO GOOD TO BE TRUE!!!
Countrywide Launches Program to Refinance or Modify $16B in Adjustable-Rate Mortgages
CALABASAS, Calif. (AP) -- Countrywide Financial Corp., the nation's largest mortgage lender, said Tuesday it will begin calling borrowers to offer refinancing or modifications on $16 billion in loans whose interest rate is set to adjust by the end of 2008.
Countrywide has been under fire since early July -- it has had difficulties with loan financing, its chief executive has been criticized for selling hundreds of millions of dollars in stock and it faces pressure from the government to help keep people from losing their homes.
"Unprecedented times call for unprecedented remedies," Countrywide President and Chief Operating Officer David Sambol said in a statement. "We are determined to assist borrowers who have the willingness and wherewithal to remain in their homes, but need a little help to do it."
October 23, 2007
Countrywide Toxic Mortgage supposedly renegotiating $15 Billion in toxic loans. Trust us, it's not because of the kindness of their hearts
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26 comments:
My thoughts exactly: what does Countrywide get out of this? This is an enormous effort to fill out all the paperwork - they must be getting paid somehow.
They are not just doing this to avoid owning a bunch of worthless mcmansions, although that is certainly a benefit.
I suspect there is some kind of fee somewhere, perhaps being rolled into the principal owed.
Good to see the Orange man has a soul..for a moment there I was beginning to think he was ripping people off.
God Bless him, & God Bless the Tanning Bed.
Second, kill all the bankers.
Maybe Paulison made a deal with Bozollo to lighten up on the borrowers and the SEC will lighten up on Bozollo.
Here's the silly part. I called my mortgage company, Indymac (yes, I have an ARM (at a market rate) that resets 4 years from this month) to see if they would modify my loan to a higher rate but with a longer time until the adjustment (a "win-win" for both of us) but all they would do is offer me a "refinance" - a whole new loan. Apparently they won't do a modification for a good, paying customer. A "refinance" would, of course, result in a fat commission - from my pocket! When a modification is so simple and quick, I told them a refinance would be like pulling in my driveway, realizing I hadn't parked straight, then going all the way back to the grocery store and home again just to re-park the car. If I were going to refinance, I can go anywhere. Why would I go with the same inflexible people who refused to talk to me about a modification??
Lol, 50 year mortgages. Why dont they just slap "SLAVE" on their foreheads and just get in line to make mud bricks for the pharoh.
Good move on their part. Shows they "care". And will also end up earning twice the interest over the life of the loan. Win-win for CW and a very smart business move.
40 year mortgages? pfff, here in Portugal you can get a 50 year mortgage, with adjustable rate every third or sixth month. As long as youre not over 75 when you finish paying.
Did i mention that a 50 year old apartment in dire need of work costs over 300k USD?
Don't be silly. Nobody has to read their mortgages. The democrats' nanny-state government will simply bail them out if it was a bad deal.
With our hard-earned money, of course.
Can you imagine How much of this SLOP they must have on the books,,
This is only the subprime Slop.. What about the ALT-A Slim they stil have/Service..
this is only a drop in the bucket.
the website shows 13,000 forclosures and counting...just wait till the flood gates open next year.....We have Three ALT A CW forclosures in our community...
Nothing is moving they are now reducing prices..
If you really want to make this a political issue, wasn't President Chimpy touting the 70% home ownership a couple of years ago and how proud he was of being responsible for that?
Maybe that was a different president, I forget.
I too am a victim of the mortgage industry.I was suckered into a 6% / 30 Year Fixed note and signed blindly on the dotted line. Now I send a $1000 dollars a month and they keep $850 of it for interest. Do the math...thats $10,200.00 a year in their greedy pockets. What do they do with all that cash? How am I to save a buck for Jr's college if they steal it all? I am pretty sure there are others that fell for this scam and also need a bail-out. We will be here with our hands out.
Thank You Uncle Sam
KFC, whoops I mean CFC, would not be doing this sua sponte unless there was something in it for them. PERIOD and not just for good PR purposes, its lining orangzilo's pockets somehow and I am sure the blogsphere will figure it out very quickly but the MSM will never say a word or do a damn shred of investigative journalism to bring CFC's bogus program into the light of day.
Responsible Joe said...
I too am a victim of the mortgage industry.I was suckered into a 6% / 30 Year Fixed note and signed blindly on the dotted line. Now I send a $1000 dollars a month and they keep $850 of it for interest. Do the math...thats $10,200.00 a year in their greedy pockets. What do they do with all that cash? How am I to save a buck for Jr's college if they steal it all? I am pretty sure there are others that fell for this scam and also need a bail-out. We will be here with our hands out.
Thank You Uncle Sam
___________________________________
Please say this is a joke....
As long as no tax money is used, Countrywide can offer what refinancing they want to FBs.
http://www.cnbc.com/id/21435367
As always Diana Olick gets the inside scoop on these issues.
Way to go Diana, yes CFC is doing it because the alternative is to suffer a 90+% loss on sub-prime loans, pure and simple, to quote Diana's source "They are doing it to save their own skin"
Sharp, sharp, sharp, Keith, but in the spirit of Occam's Razor let's not forget the obvious: once cash flow slows to a trickle, something is better than nothing.
-FreddyinP'town
(PS, Anonymous comment #29 on the bling thread is me).
I love Diana Olick - one of the only reporters out there doing her job!
Here's some from her report:
This all sounds good, but I’m still wondering why this, why now? Well I got an email this morning from Janet Tavakoli of Tavakoli Structured Finance. She practically eats mortgage data for lunch. She says Countrywide may seem like it’s doing this out of the goodness of its big ol’ corporate heart, but really it has to do with the fact that recoveries on subprime loans are far worse than ever anticipated so far. Here’s what she writes:
“Last week I met with a major mortgage servicer of geographically diverse U.S. subprime loans. They work 13-hour days trying to salvage what they can, doing anything to avoid reporting a delinquency or foreclosure. They disclosed disturbing information unavailable even on trustee reports. The servicer asserted the rating agencies are incorrect in their optimism; recovery rates of 60% are unattainable. My average recovery rate assumption of 30% is also currently unattainable.”
Tavakoli says the servicer has been selling loans for 3-6 cents on the dollar. What are the issues? Legal costs relative to the low loan balances are huge and delays are long. Values of the homes are nowhere near what they were, so they’re looking at negative equity.
Realty Check Poll
What are do you think are Countrywide's intentions for their bailout program?
Help borrowers
Save themselves
Both
Vote to see results
Realty Check Poll
What are do you think are Countrywide's intentions for their bailout program? * 273 responses
Help borrowers
2.6%
Save themselves
68%
Both
29%
Not a scientific survey.
In other words, Countrywide is saving its own skin, as well as saving home ownership. The company simply has to do this because there is no way it can survive otherwise. Obviously they are seeing the recovery rates and just don’t want to risk it. This is a pre-emptive strike, and I say no matter what the motivation, it’s a positive move from Countrywide.
Problem: Bad loans in default hit the balance sheet for the whole loan amount.
Solution: Declare bad loans as "worked out" loans and they're no longer in default (for awhile). Buying time, baby. . .and maybe the auditors will buy it.
I have some web traffic charts for real estate sites on my blog,and the public is not looking at buying a home lately!
http://economicdisconnect.blogspot.com/2007/10/sands-of-time-are-running-low.html
CountrySLIM's motive does indicate their compassionate nature in the least. This strategy is an attempt to change the landscape of negative publicity they've had for the past three months.
The sad reality: Most homeowner's are upside down, mortgages greater than value of home. Most homeowner's are in arrears, causing a significant drop to FICO scores. Most homeowner's have a prepayment penalty thanks to CountrySLIM. Most homeowner's current mortgages are greater than $500k jumbo loan territory. CountrySLIM has changed their maximum loan amount to $417k, the amount insured and purchased by Fannie and Freddie. Meaning homeowner's will have to accept a 1st and 2nd at higher interest rates.
The few that CountrySLIM will save will only benefit their revenue by once again charging outrageous fees and imposing new prepayment penalties.
Homeowner's PLEASE don't be FOOLED by NO COST loans advertised by CountrySLIM! This is a back-end cost. It may not appear on your Good Faith Estimate. However, you will be paying for it with a MUCH higher interest rate. If your loan amount increases at all, question it!!!
I'm sure you've heard the old adage, "There is NO such thing as a FREE lunch".
Hahahahaa!!!!
Off the F*%$ing chart!
http://countrywide-foreclosures.blogspot.com/
is it an error? who knows.. this totals about $39 Billion
195,000 X $200K
and this.... Countrywide's REO's up to 195,000 units. WTF? Is this truth or trash?
http://countrywide-foreclosures.blogspot.com/
Someone should dump $15 Billion worth of monopoly money on top of every CNBC analyst (amd there are several) that parrot the permabull thesis that the credit crunch is over and the subprime problem and writedowns have all been contained and realized this past quarter.
Toxic green mortgage slime would also work well to shut up these CNBC pump monkeys.
CEO Was 'Shocked'
Mr. Mozilo told investors in September 2006 that he was "shocked" so many people were making the minimum payment. He called a sampling of borrowers to find out why. The "general answer...was that the value of my home is going up at a faster rate than the negative amortization," he said. "I realized I was talking to a group...that had never seen in their adult life real-estate values go down."
The temptation to use these loans was strong. A borrower with a $520,000 mortgage at a 30-year fixed rate of 6.05% would pay $3,134 monthly. With an option ARM carrying a 1% introductory rate, the minimum payment in the first year plummets to $1,673.
pwnd
whbja1 Nice Article.
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