Archive for the 'Rants' Category
Sorry folks. I guess server issues has taken me out of action the past few days. Tomato Blogs is working on the problem and seems to have restored the archives up through December. Hope to have it all back shortly. Don’t go away. I’ve got a week’s worth of pent up frustration and updates to share with you.
read comments (3)Very quietly, Countrywide has once again proven the claim: “No one can do what Countrywide can.”
After pushing the worst mortgage junk ever created, pushing their originators to sell that crap, pushing their stock in insider trading schemes before the meltdown, they have pushed this garbage on the Atlanta Fed as collateral for a quiet loan of $51 billion of your money.
A few days ago, New York Senator Charles Schumer was concerned enough about Countrywide to write this letter to the Atlanta Federal Home Loan Bank. In it he says:
I write to express my serious concern over the lending practices of the Federal Home Loan Bank of Atlanta, specifically in regard to the significant volume of advances made to Countrywide Bank. I am concerned that the loans being pledged by Countrywide to secure these advances may pose a risk to the safety and soundness of the FHLB system as a whole.
In exchange for the $51.1 billion in advances, Countrywide pledged $62.4 billion in loans, nearly 80% of its entire investment portfolio, as collateral. Of that, almost half consisted of pay option ARMs, most of them underwritten without any income verification. Delinquencies on the company’s pay option ARMs leaped 78% in the last quarter.
Schumer continues…
CountrywideHomeLoanSucks
I ran across this website the other day and got a big laugh. But it turns out there are a lot of people who are not laughing about Countrywide.
www.countrywidehomeloansucks.com
is a website where you can buy merchandise, join a class action law suit, post your personal Countrywide nightmare, or read the horror stories of other consumers.
Now, there are lots of reasons to dislike this company. For many years we refused to do business with them, since it was Anthony Mozilo’s expressed goal to put mortgage brokers out of business.
Later when forced to acknowledge that mortgage brokers held a lot of market share, he struck a more conciliatory pose and asked for our business through the wholesale channel. After opening relations, his reps vigorously promoted sub-prime loans as well as the 5–year Fixed Pay Option Arm—certainly the most worst loan program ever devised.
I ran across this article from Kiplinger Forecasts this morning. It does a fair job of addressing the question on every troubled home owner’s mind: Is there a bail out coming?
So far, the answer appears to be no. Despite high level legislative chatter, the recent Bush proposal for FHASecure—the details of which remain vague, and the inevitable debate about the “moral hazard” of keeping the dirty bath water to save the baby, no broad plan has emerged. That may be understandable in light of the fact that 70% of the foreclosure problem exists in 7 states. If your state didn’t contribute to the problem, do you want to pay for its solution?
And yet there is something bigger at stake.
The foreclosures in those 7 states will have a broad negative impact on consumer spending. That hurts retail sales and profits, and ultimately jobs. The negative wealth effect and spending pull-back on the part of foreclosure victims is actually the smaller part of the problem. Think about the much larger group who won’t lose their homes. They’re feeling the pinch too. And they’ll spend less as a result. It’s like the scare-movies they show you in driver’s training. Even though that wasn’t your blood on asphalt, you’ll drive a little more carefully after seeing what happened to the other guy.
Words of Wisdom from a Mortgage Veteran
These words of wisdom came in the form of a Monday morning email from fellow loan officer and mortgage broker Dave Ryland. Dave was already a seasoned professional when I got into the business 18 years ago. Through good and bad markets, Dave has lived and demonstrated the kind of integrity & professionalism that defines us at our best.
Through the current mortgage industry shake up, positive changes are evolving. Here are a couple of Dave’s thoughts:
I have realized why the contraction in our industry has me encouraged rather than worried. For many years, I took pride in the fact that it took effort and intelligence to pilot a loan through the system. I built my reputation and career by wowing Realtors with smooth execution and knew there was a dollar value to my skills.
In recent years, the amount of effort needed to complete a loan has declined. In a sense, the standards have been “dumbed down”. An originator could bring about a successful closing with little pride in their work. That, I believe, is changing. I welcome it. It will elevate our sense of worth. It will elevate our compensation. It will re-elevate the reputations of competent and ethical loan officers who have been competing with realtors who did their own loans, thinking that origination is a piece of cake.
Those people are going to discontinue their activities also, don’t you think? Is that a bad thing? Hardly! When the Realtor who stopped sending you business in 2003 calls you up to pre-qual their next buyer, be grateful. I will be.
Sincerely, David Ryland
Thanks Dave! What a great way to start the week.
Got a comment? Join the discussion below
Credibility in a Can, Just Add Water
Like every other lender and Realtor today, I am the target of a daily assault of emails pitching seminars, webinars, CDs, coaching programs, mortgage leads, and the secret map to instant riches. It seems like refugees from our industry have fashioned new careers selling the secrets of the overwhelming success that apparently drove them out of the business.
This one is so good I just had to share it with you.
The Newly Discovered Secret Weapon That Builds Instant Trust And Credibility With Your Prospects And Turns Shoppers Into Closed Deals For Less Than The Price Of A Grande Latte, GUARANTEED.
Wow! It’s new; that’s really great. And the weapon part is cool. But I do feel a little foolish at having wasted time honing my professional skills while this guy was busy finding the secret. And it’s cheaper than a latte!
I Thought Flippers Were Out of Business!
I was talking today with a woman referred by a past client. She and her husband were in the middle of a 100% cash-out refinance on their home. They have a small handyman business and need a “stated income” loan because their tax returns don’t show adequate income. She was upset because her lender had quoted her 12% on her 2nd loan.
After telling her she should feel lucky to get any kind of 100% stated income financing right now, I asked why it was so important to pull all of their equity out. She replied that they had just paid $12,000 to go through an on-line school to learn how to flip properties, and they needed the money to get started. In fact, she said, they were just dying to get started.