What you can do for Countrywide

Funny that as a mortgage loan officer, the only mortgages we could never refinance for customers were the ones that Countrywide originated because all the values were inflated at origination. Not a problem with other lenders and now Countrywide makes customers apply with them to buy auctioned properties or foreclosures! Wow, lets do more mortgages with the company that got us into this mess in the first place, great idea……

I’ve been saying for years that home prices in certain areas of this county were more fantasy than fact, but that doesn’t mean that every real estate market in the US was over-valued.

Back in 2003, my wife and I purchased a 3000 sqft home in a very nice neighborhood for $179,000. Today it would probably sell for $190,000. Two percent annual appreciation on a home is a reasonable number.

However some markets were seeing twenty to thirty percent increases each year and it was “fantasy” appreciation of this kind which has lead to the mess the real estate market is in today.

Countrywide screwed me to the wall and made alot of money off me, partly due to my ignorance, partly due to their greed. Let them pay the price for their “ignorance” in how their greed would affect them in the future.

Countrywide owns landsafe which is where all of their appraisal go to..

they charge the consumer a lot more then they pay for the appraisal. In Georgia, they pay $200+/- and they charge the customer $350+.

It is a cash cow.

as a 20 year appraiser, I do not know of a competent appraiser doing work for landsafe.

Many times, the person who is actually doing the inspection, is not the person who’s signature is on the report…They are RUNNERS - designed to make money for the sweat shop…

With NO enforcement,,these people NEVER get caught…

NOW THAT IS A STORY WORTH FOLLOWING UP ON….

I tried to purchase a home from Countrywide. They gave me the biggest run around on a short sale, listing the home for a specific price, but when I made my purchase price they referred me to a group of lawyers who eventually raised the house price by 20% what they had listed it for. No explanation was given. Countrywide is rotten and don’t care about the people they want to move in to the homes they own. They deserve to drown in their greed.

Rick and Jennifer are right. But it goes even beyond that. The citizens of this country need to be taught the basics of sound financial management and not give in to every sales pitch.

In this country today, it’s all about the sizzle without the steak.

Now, our country has become so commercialized, that you can’t play a sport without having to listen to some hype about products. And people have to realize that today, everyone is a salesman first and expert second.

And a salesman is good for one thing: selling. Our children are taught to buy and not save. And it apperas that even bankers, who are supppose to be the financially saviest of us all, the folks we entrust our meager savings to; have fallen to the allure of something for nothing as well.

We need to take a look back a generation and see what they based their beleifs and values on and build from that. It certainly can’t hurt at this stage of the game.

Jennifer is right on point. We have lived way beyond our collective means, and now the bill is coming due. Forget the ATM mentality, and plan on surviving until better days arrive.

With a falling real estate market an appraisal is not a good judge of the value of a home since it is the value as of the day it is finished. Buying a home is gambling and we Americans prefer to think of it as a bank account. There is no guarantee that we will ever have appreciation again, it is simply a gamble. The real estate market crash has more to do with the fact that the average income in most of our urban areas does not pay for the average home. It is unrealistic to think that you are going to have any guaranteed equity in your home as long as this continues. In the past we have been able to bank on the fact that if we got into financial difficulties we could simply sell the property and with our six months reserves(most don’t have this but in this market even those that do are not safe) we would be fine. That is simply not the case right now. Whether or not we could have predicted this large of a melt down it doesn’t solve the underlying problems such as most Americans don’t make enough money to live on and save for retirement or even rainy days. Most Americans do not make enough to afford a home and if they had to qualify for homes that they could really afford the value of every home in America would probably fall 60% to 70%. In the olden days we did not lend if your industry had a chance of a downturn because your job might be at risk. Right now that means that the only ones I would give a loan to are oil company executives. We need to stop trying to come up with easy answers and stop glossing over the reality of our choices. We need to drop our victim mentality no matter how rewarding that is for those among us who are sue happy. None of these homes would be in foreclosure if the owners could do one of the following three things no matter how much fraud or bad lending was done - sell the home, refinance the home, or have a job that actually pays enought to afford the home. Most of the homes in foreclosure are not mansions, they are our next door neighbors. It shouldn’t be unreasonable for an American to think that they should be able to make enough to afford a home. If we aren’t willing to let our home values fall to what their true value is then we need to make sure our jobs pay enough to qualify for the home values we want to have. There is no other answer than one of those two things.

Three things and I will shut up. First: If the secondary market didn’t loosen the guidelines on the loans they would buy to the point where 100% financing on a multi family property doing a Full No Income Documentation/Adjustable Rate loan there wouldn’t be half the foreclosures. Second: If each state had a licensing process that required all Loan Officer/Mortgage Consultants to pass a standardized test along with a “Fraud Awareness” Training that is REQUIRED for each Broker or Mortgage Lender we wouldn’t have MONEY Hungry scam artists that were changing oil last week at some lube joint writing a half million dollar loan the following week. Third: I promise this is it. If just one Major Lender prosecuted a few of the Loan Officers who committed Loan Fraud. I firmly beleive the amount of Fraud in our industry would not be as rampant as it is. Instead, the Fraudulant LO is merely released from their post and its business as usual for them. They just go to another organization and open shop.

In closing: The sad thing is this-The quality customers who work hard each day. The borrower or prospective borrower who has done it all by the book and earns an honest living. They are the ones who are paying for this! They are the ones who are going to feel the pain of the current market conditions. They are the ones who had planned on using the equity in their home to help pay the cost of their childs college education. (that aint happening) The effects of the greed and fraud that ran wild across this country over the past 6 years will be felt for years to come. I hope it was worth it!

Anyone buying an REO property right now in this enviornment is getting a delicious deal, regardless of if it is Countrywide REO. With regard to appraisals, keep in mind that most loans now that are being provided in soft market areas are generally FHA. Only certain appraisers can do these appraisals and they fall under a different scruntiny. Landsafe, yes a “cash cow arm” of Countrywide hacks values left and right for loan officers. The appraisals they don’t hack are FHA. Yes, and the gentleman had it correct, with all the layoffs the biggest problem Countrywide has is their ability to close a loan before the close of escrow date. “OH” and lets not forget the greedy asset managers who like to stipulate 30 day escrow and “as is” conditions for the REO’s that they are offloading. With the flood of FHA loans, the idea of a 30 day escrow is insane. Middle management reverts to the well cirulated comments like, ” WE GET IT” However if they would listen to the soilders out in “Branchland” they would realize that missing close of escrows are a most ridiculas mistake. Ask the soilders of Countrywide what to do. Get rid of most of the top heavy regionals and that would solve half the problems. Establish some continuity with the underwriting system and perhaps Countrywide could get back to doing what they used to do well. Oh, one more thing get rid of Fast and Easy, Reduced doc programs have we not learned our lesson? I believe that the lending guidelines allow for people to continuously push the “reasonablness of income guidelines” If consumers cannot document their income, then they cannot buy a home. Let’s not forget the comments with regard to the borrowers who pulled a ton of equity out and are now claiming they are the victim of reckless lending. Lets not forget that this whole secondary market was not all subprime. I suspect that half the loans that went into default are ARMS, I.O. , neg ams, that allowed > 90% LTV and most of those are only available to > 680 credit scores. Folks > 680 credit scores were not subprime….Yes, I heard there are another 2 million ARMS due to adjust. These are not all subprime loans. You couldn’t tell consumers they couldn’t afford a 1/2 million dollar home, consumers would not listen to reason. Here we go again………..

JUST THE FACTS…

The biggest residential Mortgage Lenders and Mortgage Bankers in the US (CountryWide [they call themselves "America's Home Lender" when wholesaling through a Broker], Greenpoint, New Century and others) are insolvent or BKrupt because their portfolio managers on Wall Street who wanted to sell repackaged securities [equity instruments] to fund managers [thru the secondary market] convinced their in-house attorneys [company employees they pay to dream up and write RE-notes] to come up with 2/28 & 3/27 ARM’s (extremely short refi windows) with insane margins (I have seen them as high as 6.5% with floors as high as start rates upward of 9%) and prepayment penalties (up to 2 years of payments) for up to 5 years.

The executives and attorneys of these now unstable companies knew when they started propagating these sinister RE-notes that it would eventually cause a disproportionate economic meltdown but they really didn’t care because pure capitalism doesn’t care who it hurts; it’s survival of the fittest driven by greed, in the moment, with no thought for the long term consequences or harm it might cause others. These companies and their grossly overpaid upper management made millions, some probably made billions, preying on unsuspecting, financially uneducated borrowers.

One must not forget that only the elitists in this country get a good education in personal finance. 1 out of 2 (a mere 50%) of US teenagers will graduate from high school in 2008; moreover, the republican party leadership continues to shove educational programs such as “no child left behind” right down the throat of our dumb-down middle-class citizens through the use of blatant lies and propaganda conveniently spun and flavored for the media and masses like so many smoldering sticks of dynamite wrapped in soufflés! It’s much easier to fool an uneducated person than one well schooled in financial instruments and markets; our current K-12 curriculum is pathetically anemic in the area of personal financial survival and decision making. There is one particular political party that likes it this way.

One can only smile wider knowing it was Republican Senators McCain of Arizona and Gramm of Texas who co-authored the lawful deregulation of Wall Street in 1999 after the tech stock meltdown, on the back of a republican controlled senate and congress, and then laid it on the table of a lame duck president, we all wish had never stained Monica’s dress, for a signature that would stain the very financial stability of our nation only 9 war torn years later (as far as I’m concerned, they all took advantage of almost every American Citizen. Oh ya, the Senator Gramm I referred to in the first sentence of this paragraph is the same Senator Gramm who is being considered for a cabinet post as Secretary of the Treasury under a what could be a McCain Administration… hello!

These lenders and mortgage bankers have huge squads of lobbyists in Washington who conspire with ignorant elected officials to blame the Mortgage Brokers for this whole damn mortgage mess the lenders and bankers created. For all you consumers sake (listen up!), did you know that Banks, S&L’s and Mortgage Bankers are not required to completely disclose the fees you’re charged by them when they sell you a home loan? That’s right! They don’t have to disclose Yield Spread. They can fake the points they tell you your interest rate will cost to buy right in front of your face and it’s all legal gravy on the top for them. They are virtually unregulated because they have lobbied dumb elected officials into believing the Brokers are the villains! Nothing could be further than the truth; Mortgage Brokers and the Loan Originators working under the umbrella of the Broker’s license are “THE MOST REGULATED PART AND PERSONS OF THE ENTIRE US MORTGAGE INDUSTRY”! In the state I hail from, Washington State, Brokers and their Originators are required to be licensed and to disclose every dollar of fees down to the last red cent; and, the penalties/prison time are extremely stiff if you screw up, regardless of whether it’s an honest mistake.

The answer to this whole mortgage debacle is really quite simple: 1) regulate the bloody crap out of the Banks, S&L’s and Mortgage Bankers in the areas of Full Disclosure and Predatory RE-notes (it’s the lenders and bankers that write these insane promissory notes that are obviously going to lead to foreclosure); Mortgage Brokers don’t write RE-notes, they just sell what the lender pushes them to sell. Banks, S&L’s and Mortgage Bankers should be subject to the same degree of disclosure and regulation as Mortgage Brokers and their Originators! 2) Banks, S&L’s and Mortgage Bankers should be subject to the same degree of licensing for the persons who sell their products ‘IN-HOUSE’ as the Mortgage Brokers who sell the products offered them through these Lender’s wholesale divisions; walking into your local bank, S&L or CW retail outlet is far more dangerous because employees who sell loan products “in-house” are not required to be licensed and cannot be prosecuted for their crimes. And, 3) It’s time the elected officials in this country grew some backbone and insisted that antitrust laws be enforced! Companies such as CountryWide that have their own credit reporting services and their own appraisal services have far too much opportunity to minipulate the markets; they should be split up, NOW, to avoid any further conflict of interest. Lenders and Appraisers and Credit Reporting Companies have no business in the same bed together… it’s kind of like Jim Jones and cyanide; a bad recipe for our economy and our general population’s personal financial well-being.

Next time you want an honest home loan, with fully disclosed terms and fees, and an honest appraisal, shop your loan with a few reputable Mortgage Brokers.

Call your elected officials and tell them to let companies like Bear-Stearns and CountryWide go bankrupt because it’s only a product of their own greed and we, the taxpaying citizens of this country, should not have to bail these greedy b_____s out! Tell them if they want to throw money out the window they can do it over mainstreet (at a low altitude of course) to all the unsuspecting/purposefully uneducated people whose lives the big lenders and investment bankers have destroyed with their greed, corruption and deception. Tell Bush, Cheney, Mukase, Bernanke, Paulson, McCain and Gramm we’re not going to be used up and spit out to homelessness while paying tens of billions of dollars through unconstitutional shell-corporation Federal Reserve and Treasury Schemes to cover the illegal business dealings wall street and the bankers have lined their pockets with for almost a decade!

What this country and the US economy need right now is a President with more than a pocket full of wishful thinking, who surrounds himself with intelligent, compassionate people who know how to execute a critical plan fast and systematically without error; and, some honest, fresh blood in the justice department to put these thieves where they belong… all of them… behind bars! If they refuse to confess, waterboard ‘em!

I’m sure today’s blog was a dig at CFC.

OK - I do not understand this article or peoples concerns at all. Do people buy houses for what the appraisal says? When I bought my house I had to agree with the homeowner on a price first then I got an appraisal to ensure that the value was suportable when I requested a loan (yes I am not rich enough to pay cash for a house). I would think that if your looking at a house there are a vast number of concerns and considerations that people evaluate, but whatever comes out of an appriasal should NOT be one of them, unless you are just buying the house for investment purposes. If that is the case, then of course people should also get their own independent appraisal. If Countrywide is forcing/allowing people to get an appriasal through them they are probably trying not to overstate the value of the property to get people to bid more, they are probably trying to realistically or conservatively evaluate the property value to ensure that if you do finance the loan through them that the collateral will support the loan value. That is the problem that is impacting the industry today - that values of properties are no longer supporting the loan values. By the way, bank owned properties are a good way to get deals on houses, but only if people evaluate the vast number of considerations taht should go into buying such a large asset. If people just rely solely on some appraisal, whether independent or not, they are not being a prudent home buyer (whether they intend to live in or just invest in that property).

I have performed appraisals for LandSafe…they allow you do your work and do not pressure their appraisers. The setup CW & LandSafe have created is ideal for trying to prevent inflated appraisals and pressure from lenders on appraisers.

I find it very interesting that what continually goes unsaid is that the borrowers took the cash out of their homes and spent it—now they want to be bailed out. Where does the due diligence begin for the borrower? We are just supposed to bail them out because they got in over their heads? How about they give back the cash out the took and then the lender could lower the interest rate and their payment would not escalate beyond their means. Please, people, do not paint with such a broad brush. There are many fine employees at Countrywide and Landsafe, just like there are fine employees at Exxon Mobil, Shell, the power companies in Texas that have continually gouged those of us who live here…Were there issues and practices that should not have gone on at most lenders the past five years? Yes. But unless you can withstand a sharp eye into your glass abode, lets stop the stone throwing.

What is this article really saying? I am not sure of the point. This article is very poorly written, and goes from one theme to the next. this author is clearly trying to jump on the anti-countrywide bandwagon by printing this garbage.

It is so easy to point fingers at Appraisers when there is a “Downturn” in the housing market, this only re-focuses everones attention away from the REAL problem - that the USA IS IN A RECESSION, and nobody want to say it! When the housing market is skyrocketing, Appraiser’s bring in a refinance too low - go figure! The problem is people kept buying houses the could barely afford (lending practices??), and when you couple that with a loss of job, or the fact that they pulled all the equity out of their house - and the decline in the value of the house … what do you think you get? Is it soup yet? Some people are responsible, and buy what they could afford. LENDING PRACTICES MUST BE LOOKED AT! How a person QUALIFIES must be changed … and Loans with “variable” interest rates must not be sold to other risk takers (that cry foul when interest rates go up, and the lendee stops making payments)!

Steve, it would be a RESPA violation if Countrywide required financing with CW. Just a pre-approval is O.K.

Rita, apparently it is not “well known” that Countrywide LOs have no contact with appraisers..don’t order appraisals, can’t specify appraiser, can’t even talk to them.

Countrywide does own a subsidiary that provides appraisals - so they’re definitely not independent appraisers!

Just because the appraisers are independent doesn’t mean they can’t be coerced into giving a “Countrywide” favorable appraisal.
Checks and Balances, need to be stressed in any situation like this.

Mr. Hansson is incorrect…Landsafe is a division of Countrywide. They do the appraisals.

A savy buyer would get his own appraisal… just to be sure.

This poses no RESPA violation, or their ability to do these loans would not be allowed based on all eyes that seem to be on them. Uneducated media seems to be Countrywide’s biggest issue.

Buying homes from CFC would be great. Problem. They laid off so many employees that trying to close a sale can take four to six months and longer.

It is well known that Countrywide was successful in pressuring MANY appraisers to inflate values Tom. So you might say that many of “their” appraisers are corrupt.

If you don’t like Countrywide’s offer use another lender to make sure you are getting a good deal.

I recommend Freedom Mortgage Corporation, Headquartered in Mount Laurel, NJ.

(866) 938-2252

They can get you a free second opinion.

Good point if you believe that Countrywide is a hack company employing hack people.

However, if you know the truth, a pre-approval from a Countrywide LO is indead a pre-approved borrower. All Countrywide is doing with this policy is insuring that a transaction is put together with a real borrower, not just a person with a piece of paper that is useless.

Mr. Barr also shows his ignorance by stating with scorn you get a “Countrywide appraisal”. Appraisers are not employees of Countrywide and Mr. Barr should be carefull insinuating that appraiser’s are corrupt.

It poses a bit of a RESPA violation as well.