This entry was posted on Friday, August 10th, 2007 at 5:56 pm and is filed under Housing Bubble, Mortgage Programs, Subprime Meltdown. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
Countrywide & Washington Mutual Reveal “Unprecedented Disruptions”
If common sense and research studies hadn’t already convinced you that you should use a mortgage broker (vs. a mortgage banker or direct lender), then chew on this:
Countrywide and Washington Mutual, two of the nation’s largest mortgage banks, stated this week that they are facing “unprecedented disruptions” in the secondary market for mortgages that could adversely impact earnings and financial condition. Unprecedented disruptions. Hmmmm… that’s a vague and scary phrase, but what does it mean?
It means that if you arrange your home loan through a mortgage bank and they experience an unprecedented disruption of the we-can’t-fund-your-loan kind, you may be sleeping in the U-Haul at the close of escrow.
Think I’m exaggerating? Everyone’s heard about the demise of American Home Mortgage (AHM)—one of the nation’s 10 largest mortgage bankers—who one week ago had exactly that type of unprecedented disruption. The were about 7000 people suddenly without jobs, but more to the point there were $800 million in approved loans that didn’t close. U-Haul must have had a great weekend. Those borrowers and AHM employees did not.
How is a mortgage broker different?
Mortgage brokers can secure financing for you from Countrywide, Washington Mutual, Bank of American, or anyone else you can name. And we can do that at terms equal to or better than you’ll get direct. We can shop many lenders to find the best terms or to find the one lender whose guidelines will get you an approval. We have access to the full spectrum of loans, not just what our bank wants to lend. And in this market, we can secure financing from a bank who will be around at the close of escrow. If that bank folds without warning, a DO or DU approval is good anywhere else, so we can fix the problem in a heartbeat. You’ll be sleeping in your new bedroom instead of the moving van.
Now why am I beating this battered old drum? Because, since the beginning of the year, over 50 lenders have gone out of business. Most were sub-prime lenders, but the recent demise of —proves that even the big bankers are vulnerable. More importantly, the current mortgage crisis has all the banks completely freaked out. Pricing and underwriting are inconsistent, availability is spotty, and no one knows when things will settle down.
Choose your lender carefully, but for best results, work with an experienced mortgage broker.
August 11th, 2007 at 4:48 pm
I have so much faith in our company, beginning with our owner Darrell Benton and working up to Kurt Reisig.
I have to admit that it has been a tumultuous year for our team, but what we have learned is that we are adaptable.
Yesterday, I had one of my loan officers talk about how they hated change…I just said that we face the uncertainty of change everyday.
It is like you said..this is our season to seize opportunity, to adapt, to learn, to reinvent how we do business, to focus on servicing and not the commodity, to educate our client, and most importantly, to maintain the relationship that we have with our business partners.
I find Lending Clarity to be a source of affirmation in an otherwise negative situation.
We come to work to close loans…that is what we are good at..and that is what we will keep doing.
Remember…Hope, Desire, and Expect Great Things
Thank You
August 12th, 2007 at 8:15 am
Alice,
Thanks for stopping by and leaving your comments. Yes, this company (American Pacific Mortgage) has great leadership and has negotiated the tumult of this market to keep the ship on course and upright. That provides a base from which we can all continue to serve our clients.
Change in uncomfortable, often painful, and most people hate it. But life IS change. Some would say that unhappiness arises from trying to eliminate change and uncertainty and make life predictable. That’s like trying to stop the sun from rising and setting. We have no choice but to welcome change and make it our friend.
This market offers tremendous opportunity. As YOU say, expect great things.
Thanks so much.
August 13th, 2007 at 2:58 am
[…] Look at Countrywide’s August 2005 Newsletter and their statements last week. Why was no one listening? […]
August 17th, 2007 at 1:14 pm
[…] Nervous watchers include international banks like BNP Paribas, who have suspended investor withdrawals in response to the sub-prime market implosion. This and other actions have led to an evaporation of cash flow, which ALL businesses need to survive (it’s like us not having air to breath, folks). Countrywide and Washington Mutual have both stated they are having unprecedented disruptions from their sources for mortgages. […]
October 30th, 2007 at 9:19 am
Mutual Funds and Market Research…
I couldn’t understand some parts of this article, but it sounds interesting…
July 22nd, 2008 at 3:06 pm
[…] Unprecedented disruptions. Hmmmm?? that??s a vague and scary phrase, but what does it mean?http://www.lendingclarity.com/2007/08/10/countrywide-washington-mutual-reveal-unprecedented-disrupti…Q4 2005 Washington Mutual Earnings Conference Call - Market Research …Q4 2005 washington mutual […]