Questions on Countywide?

[Lyn5]

I was reading and trying to understand the recent news about Countrywide...but since I don't quite understand I thought I would ask here (where I usually get all my latest financial news )

What is going on and how can this potentially affect those with a Countrywide mortgage? Thank you in advance for anyone that can translate what is going on for me

 

[Malificient Tater]

are you talking about all those people who got ARMs( adjustable rate morgages) now selling/ not being able to pay their mortgages? I know 2/3 years ago alot of people refinanced or got new homes with a good rate that would adjust later, well they are adjusting and now people can't pay. Or they bought too much house and now are paying for it.

 

[clb22]

PLEASE tell me what you are reading and where it is (online or hard copy)!! I have my mortgage with Countrywide and am very interested in what you are asking about.

Historically - Countrywide Mortgage has been an excellent company. I had an old mortgage with them (no complaints) and now have a new refinanced mortgage with them - since 2005 (no complaints).

 

[Irin997]

http://money.cnn.com/2007/08/16/news/companies/countrywide/?postversion=2007081614

Countrywide is tapping into their line of credit to fund operations. They are tightening their qualifications for existising applications, making it harder for people to qualify finanically. If you already have a home loan with Countrywide, this should not affect you. However, if you have Countrywide stock, sucks for you, considering its drop.

 

[Makdyn]

that just means if that they might have a program for you anymore. If you already have a mortgage with them you are fine they most like have sold your loan to the secondary market.

If you want to get a loan with countrywide you might not be able to cause the programs are getting stricter. which means no more 100% loans, need excellent credit, your loan to value needs to be around 80%, you can not state your income.

Just to let you know it is not only countrywide that is doing this. Everyday I come in to work to find out the aleast two or three mortgage lenders have gone out of business cause of the market right now.

 

[Toby'sFriend]

eventually if their cost of short term credit gets too high, they might be forced into selling some of the loans they hold. If that happened, you will be making your payments to another company which is how most people end up with Countrywide (ie Countrywide BOUGHT their mortgage.)

If you have a callable mortgage (unlikely), they could begin exercising their call options in order to lower their risk and raise cash. If that happened to you, you would either have to pay off your mortgage or refinance.

But first they will probably do what ever large company does -- massive layoffs and reduced customer service.

 

[Straitlover]

Waht the OP might be talking aobut is the fact that Countrywide is close to declaring bankruptcy. That's what I heard on the news this morning. Don't know how that would affect current mortgage holders were that to happen.

 

[lastminutemom]

From a mortgage holders' perspective, it will probably affect customer service, but you still have to make your payments on time -- or the routine penalties will occur.

 

[imsayin]

Waht the OP might be talking aobut is the fact that Countrywide is close to declaring bankruptcy

Hmmm, if they declare bankruptcy maybe I won't have to pay the rest of my mortgage.

 

[Marie17]

Countrywide just announced that they have enough reserves using their line of credit to get through 2008.

 

[Marie17]

But first they will probably do what ever large company does -- massive layoffs and reduced customer service.

If they need to cut costs - first thing they should do is cut out all their commercials and the funding of those UNTIL the secondary brokers open up and are willing to accept new debt.

 

[ducklite]

If they get desperate, they will call all callable mortgages--which depending on how the note is written, could mean any mortgages that are deliquent at the time--all forebearances would be nullified as well as any loans with a call option. Balloons might be required to pay up rather than have the option to automatically convert. They will be looking for reasons to call notes--especially those with lots of equity which they can flip for quick cash--delinquencies of 16 days that weren't minded provided the late fee was paid will become at risk to be called.

As it stands now, I wouldn't be trying to buy or refi a home without spotless credit and great assets. The current mess is going to have a trickle down effect, and private insurers are going to cherry pick and write only the cream of the crop loans. Anybody under a 720 credit score will probably be turned down for PMI--without significant compensating factors (ie lots of cash reserves), which means that buyers will have to reach out for FHA loans if the property qualifies and they can't get a FNMA/FHLMC loan.

I expect that FHA will eventually tighten their requirements as well, especially because Countrywide is the largest originator and servicer of FHA loans in the country.

All in all it's going to become much more difficult to get a mortgage, and be much more difficult to get someone on the line should you have a problem with your Countrywide serviced loan.

Anne

 

[undertheradar]

The local real estate market is going to suffer, as both Countrywide and Amgen are reducing staffs. This will add to an already slow real estate market.

 

[Stein]

I wouldn't worry as it is not something you can affect. Even if you refinanced with another company there is a good chance they would sell back to Countrywide.

You are in a much better spot than those with money to loose, the stockholders. I don't place much trust that they are ok until at least 2008, but time will tell.

 

[Rozzie]

If they get desperate, they will call all callable mortgages--which depending on how the note is written, could mean any mortgages that are deliquent at the time--all forebearances would be nullified as well as any loans with a call option.

So I think I see what you are saying, Anne. But the freakout factor did go up when I read your post. What about those with Fixed 30 year loans that have never been late? Do these type loans as risk of being called? I thought I read where I might be in safe pasture, and my loan will just only be sold and my payment will be mailed somewhere else.

 

[ducklite]

So I think I see what you are saying, Anne. But the freakout factor did go up when I read your post. What about those with Fixed 30 year loans that have never been late? Do these type loans as risk of being called? I thought I read where I might be in safe pasture, and my loan will just only be sold and my payment will be mailed somewhere else.

As long as you make your payments on time and don't have a call factor built into your note (very, very rare on a 30 year fixed) you are fine.

Anne

 

[Lyn5]

As long as you make your payments on time and don't have a call factor built into your note (very, very rare on a 30 year fixed) you are fine.

Anne

Thanks Anne and everyone that posted...that is what I wondering.

 

[dbelmo]

I currently have a ARM, due to be adjusted in Jan of 2009 Of course I want to refi to a fix, but when now or shoud I hold out? for how long, next summer? Help!!!!

 

[ducklite]

I currently have a ARM, due to be adjusted in Jan of 2009 Of course I want to refi to a fix, but when now or shoud I hold out? for how long, next summer? Help!!!!

It really depends on your risk tolerence, equity situation, and credit situation. If you're vanilla with decent equity, I'd wait it out. If you're in a situation where you might be upside down, I think I'd start looking at options, because I don't think we've seen the bottom of the market.

Anne

 

[branv]

What concerns me is this: if Countrywide declares bankruptcy, what happens to the money I have in escrow (since they require me to pay monthly towards my end of year taxes rather than one lump sum). Can they legally disappear with this money the way some businesses have declared bankruptcy and never delivered on purchased product?