Questions on Countywide?

[ducklite]

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?

I'm sure the Feds will be watching for this very closely, so I wouldn't worry.

If they were to go under, they'd end up in Bankruptcy. Any company your loan would be sold to would be required to maintain the same terms--including any impounds on deposit.

Anne

 

[wvjules]

From the sounds of this I won't be able to buy a home anytime soon. (in about a year.) I was hoping the housing market would make it easier for me but with the lending and brokers having a rough time it doesn't seem like my plan will work out.

 

[Andrea from PA]

What it all comes down to ---

Current Countrywide borrowers have NO worries (assuming making payments)

Countrywide is the LARGEST US lender. The financial industry will not let them go out of business. The govt will work with them if bankruptcy must eventually be filed. The FED will eventually need to take action on rates if housing halts for a length of time. All in all, the country can't afford the repercussions of CW going out of business so many will come together to prevent it. This is what has already started with a large number of banks extending credit to CW this week.

The CON -- CW stock price plunged. Investors are hurting. And don't think you are not an investor in some form -- Many folks are "second" or "third" hand investors via mutual funds in a 401(k) Plan.

CON #2 -- If you aren't a homeowner & you don't have 20% downpayment you won't find an affordable mortgage. Most lenders already were tighting the reigns. I think now you may only find some local S & L who can approave you for less then 20% down.

BOTTOME LINE -- Current CW consumer -- No Porblem
CW investor -- portfolio is way down & not even worth liquidating
1st Time Home Buyer with 80% down -- You have a FANTASTIC buyers market going on.
1st Time Home Buyer w/o 80% down -- You'll have to rent or rent to own

And me -- I finally feel my Economics degree has helped me in something

 

[cats mom]

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.

Especially with price levels in So Cal!

Countrywide announced part of their plan is that jumbo loans will now make up only about 10% of their loan offerings. That figure was closer to 50% just a couple of months ago.

Many smaller lenders have already gone down that path. They won't fund anything they can't sell to Fannie Mae/Freddy Mac. I'm guessing others will follw countrywide's lead.

Sounds like it is going to be a whole lot tougher for folks to get loans above that 417,000 cap funded... even if they do have excellent credit, a substantial down payment, and they legitimately have the income to buy that expensive house.

Plus, if they do find someone to fund their loan, I've got to believe the rates on jumbo loans would have to give them pause. The spread between rates for a 30 year fixed conforming loan and a 30 year fixed non conforming loan is about .75 right now. That's more than it has been historically.

I know I'd think long and hard before signing for a jumbo loan right now.

Hmmm anyone know of a place where a basic tract home requires either a jumbo loan or a boatload of money to buy?

I read a recent interview with an LA area RE agent who said 95% of his clients take out jumbo loans. I bet he's scrambling to find money right now - that's if he HAS any clients looking to buy.

I agree that it looks like things are going to get worse before they get better. Persoanlly I'm not sure that's such a bad in thing, especially in markets where prices are way out of line with fundamentals. It's got to hurt if you're one of the folks who bought in when prices were cresting, or if you're one of the multitude who bought way more than you could really afford though.

 

[Kay1]

From the sounds of this I won't be able to buy a home anytime soon. (in about a year.) I was hoping the housing market would make it easier for me but with the lending and brokers having a rough time it doesn't seem like my plan will work out.

I wouldn't be sad if I were you. The mortgage resets are just getting started. The fallout should bring prices way down by the time you're ready to buy and if you save, you'll have a nice big down payment. You're really in a good place.

 

[Kay1]

Thought I'd add this:

http://www.ponderthis.net/2007/05/10/adjustable-rate-mortgage-reset-chart/

 

[eeyoregon]

I hope Countrywide gets what they deserve!!! They are a shady, horrible company with extremely unethical practices.

I am sooooo glad to be rid of them! I am sorry for those of you who are still stuck with them...good luck.

P.S. If you think that they are paying your property taxes for you automatically, you best be contacting your tax assessor and veirfy that your property taxes have been paid and on time!!! Two years in a row they "forgot" to pay my property taxes even though they happily took the premium for them each month. When it was brought to their attention they refused to pay the late fees/interest until I launched my attorney on them.

 

[ducklite]

I hope Countrywide gets what they deserve!!! They are a shady, horrible company with extremely unethical practices.

I am sooooo glad to be rid of them! I am sorry for those of you who are still stuck with them...good luck.

P.S. If you think that they are paying your property taxes for you automatically, you best be contacting your tax assessor and veirfy that your property taxes have been paid and on time!!! Two years in a row they "forgot" to pay my property taxes even though they happily took the premium for them each month. When it was brought to their attention they refused to pay the late fees/interest until I launched my attorney on them.

I've been with Countrywide for about seven of the eleven years I've owned property--on my second home now, and have never had a problem with them. In all honesty, most of the people who have had problems with them are people who don't pay their bills on time then get PO'ed when they are assessed late fees and such. (Not saying that you fit into this category)

As far as the taxes go, I keep a close eye come tax time to make sure they ahve been paid--very easy to do now that everything is on the Internet. I've yet to not have them paid by the due date.

Anne

 

[LadyShiva]

I've been with Countrywide for about seven of the eleven years I've owned property--on my second home now, and have never had a problem with them. In all honesty, most of the people who have had problems with them are people who don't pay their bills on time then get PO'ed when they are assessed late fees and such. (Not saying that you fit into this category)

As far as the taxes go, I keep a close eye come tax time to make sure they ahve been paid--very easy to do now that everything is on the Internet. I've yet to not have them paid by the due date.

Anne

Anne, I unfortunately have to disagree with your assessment. My best friend had a horrible time with her loan in Mississippi. Taxes weren't paid properly, they didn't send the title when they were supposed to, etc.

BF's loan was paid faster than it was due, so late payment wasn't an issue.

Brandie

 

[KandiB47]

Countrywide could save some money by stopping sending those HELOC things in the mail every two weeks and having people call my house all the time to, "tap into my equity." No Thank You. I thought telemarketers were bad until I got a Countrywide loan