What the hell is Countrywide thinking?

[javasaurus]

A foreclosure story that will likely piss you off.

People complain about too much government regulation of industry -- but if we don't regulate industry the greedy get rich and the little guy loses his house. Unfortunately, the government has failed time and again to find the right balance of regulations, or they are focused more on business-oriented lobbying activities rather than protecting the people.

Comments

[blueeowyn.livejournal.com]

What the hell is Countrywide thinking?
Money, money, money!

[cozit.livejournal.com]

Yeah, it's not a great thing - but they'd be better off going after the real estate company as well/ instead. There's nothing saying they have to do anything... and generally they'll shift the loan to be paid off over a much longer time period (which was offered). Though I definitely agree that the addition of more closing costs shouldn't have been done - or that the re-payment should have been stretched out a bit more as well, if they couldn't afford to keep up with the agreed on amount.

Then again, people *should* know to work out their budgets when buying a house - and buying a balloon type mortgage has *always* been described as risky. I know that we worked out what our payments would be if we bought at the top of what they said we could... and decided that even 3/4 of that would be rather higher than we were comfortable believing we could pay. On the other hand, Countrywide had no business leading them on to believe something could be worked out that would be "do-able", either... especially for so long.

I have a *lot* of sympathy for those on fixed/lower incomes who took out a second mortgage to help them deal with the rise in taxes on their property... and are having trouble dealing with those payments - its sad when people are forced out of houses they've been in "forever" because of rising property values.

But, while I have *some* sympathy for buyers like the ones in the article, they stretched further than they could cover. period. Value going down stinks big time... but they should never have borrowed more than they could pay at the rate they agreed to.

I also think the company stinks big time for approving a loan that was probably fairly obviously too large a stretch. And that all the companies who have done so who are whinging about how much money they've been losing from all the foreclosures that aren't worth as much as they loaned out not only deserve what they get, but more. (Their executives deserve their own overly hot and torturous spots in Hades, too... for their part in convincing people that they could afford more than realistic).

[blueeowyn.livejournal.com]

I think there is a lot of blame. The people bought the house believing that the lenders/agents were believable when they said that in a couple of years things could be dealt with. I gather that they could do the original payments but when interest rates went up they got into trouble.

If Countrywide was leading them along (and I admit to being perfectly willing to believe that) then they are at fault, the people could have tried to sell their house at the beginning of the market bust if they had known that they couldn't adjust the mortgage.

I also agree that fixed income people who have to sell their (often paid off) house because they can't pay the taxes are a true tragedy. The Beebe Ranch (Misty of Chincoteague) had a lot of it sold off for that very reason, the condos moved in next door and land value soared and social security didn't cover the new taxes.

I also HATE when a family who has a farm (esp. if it has been in the family for years) and developers move in on either side, values go up (and complaints from yuppies who want the pastoral scene but can't take the fact that once a year the calves get weaned and it gets noisy or whatever) and force the farmer (who was there first) out. Same with riding easements which get blocked by fences. Hmm, better get off the soapbox.

[cozit.livejournal.com]

The thing is that *they* signed the loan paper agreeing to the rise in rate... anything else they "might" do between that signing and the ballooning rate was purely guesswork on anyone's part - if they couldn't do it, they shouldn't have signed to do it, period. Gullible, maybe... more like wishful, probably... but also still their own fault.

The farm thing is a big problem... bigger than even the fixed income folks in general (as theirs tends not to be as adjustable an income as some).

For some reason I'd thought that the riding easements had been better...guess it's gotten worse again. I *know* I remember there was a professor at UMCP who was *very* active in an organization that worked to keep them open (among other things)... though he was well past retirement age (I'm pretty certain) even when I was riding there... and that's been 15 years or so now.