Hello all: I picked up the paper yesterday and saw that the governor of our state, Christine Gregoire, had fined Countrywide Home Loans $1 million dollars and ordered them to cease doing business in the state of Washington. Countrywide, of course, can appeal this. It will be interesting to see how this all plays out. I'm aware other states such as Illinois are litigating against Countrywide as well.
My feelings are it may be a moot point. I've always felt that once the Countrywide/BofA merger goes through (which is slated any day now unless it falls through), Countrywide will cease to exist. To me, it doesn't make any sense to keep the Countrywide name, especially since it's pretty tarnished right now. I'm sorry Countrywide may go away although I really haven't encountered them much recently. I would bet their loan production is way off and a lot of folks have probably already jumped ship.
The bottom line is Countrywide wasn't the only one doing shady loans as we well know. They just paid the biggest price because they were always tooting their horn the loudest about how special they were. In this day and age, it obviously pays to run your business ethically. The flip side is potential jail time! Good luck to all of you that are left. We'll get back to prosperous, and, hopefully, honest, above-board times. Have a great day!
Paul
Paul McFadden
CW has been funding loans as Countrywide Bank for some time now, knowing that they were going to get their state licences pulled. This was purely a political move. BofA is loving every minute of this...watch their stock price his $18 after 2nd quarter earnings are reported. Go short on BAC. Live by the option arm, die by the option arm. Additionally, FAST and SLEAZY will go down in the books as one of the greatest contributers to this mess.
Thanks, Rich. I know you're not a big fan of CW. I always appreciate your insight. Take care.
Paul
Rich, Paul
What about all of the loans that are currently in process at Countrywide for our State of Washington? I am sure there are a number of home-buyers and refinancers that are a bit concerned at the moment.
What about our freinds that are currently working in Countrywide offices in our State or other States for that matter? I hate to see any more of my industry partners lose their jobs.
I am not a Countrywide fan myself - but this could put allot of transactions in jeopardy. I worked for Home 123 (New Century Mortgage) when Washington State issued a Cease and Disist Order and I have to tell you it was a very difficult time for myself, my clients, and my partners.
Thanks, Cheryl, for your thoughts. I also hope that the bloodshed is almost done and look forward to happier times for everyone in our industry who has lost their jobs. Have a nice day!
Paul
It's not that I am not a "Fan" of CW, I just think they went very wrong in their methodology and business plan over the past 5 years, as did many others. I feel for the thousands of employees who have "drank the Koolaid" and are suffering/will be suffering as a result. A "mortgage oligarchy" is not beneficial to consumers.
Thanks, Rich. I think they got greedy and wanted to control the world. Ultimately when you stop serving your customer and start serving yourself you're ripe for a fall!
Paul
Paul,
My opinion here is that you are drinking the media juice. Countrywide funded 1 in 5 mortgages in the USA. PLEASE visit my recent posting regarding the buyout and all of the positive things that Countrywide contributed to the American Dream.
Countrywide was the face of mortgages because we were the biggest..by ALOT. Just like when you think mouthwash ... you think Listerine. When people thought mortgage, they usually thought Countrywide. EVERY bank booked the same types of loans, or sometimes worse. The portion of our portfolio that has the highest level of default is that which we purchased from brokers and 3rd party lenders.
It is actually the credit rating agencies that TOLD US AS AN INDUSTRY what the risk factor was. It was their job, and they dropped the ball. Our name was run through the ringer and as a result I am very pleased that we will be taking on the Bank of America Brand.
The bottom line is that BofA's platform for writing mortgages totally stunk. Anyone I knew that tried to get a mortgage had a difficult time with communications and processes. They know we are THE BEST because we have shown it. They will take massive hits on CW's 1.5 Trillion dollar portfolio over the next several years. They are willing to to this because they know that we will make them the mortgage pro's , just like we have been doing for decades under the name of Countrywide.
I'm not a corporate junkie, I'm just stating the facts.
Thanks!
Christina: I really don't pay much attendtion to what the media says. Although I appreciate your "pro Countryside" stance, I would tell you that any company that gets big and starts tooting their horn is in trouble. Enron did it along with countless others. I'm sure CW is a fine company and they're obviously not the only one that has been caught with their pants around their ankles (think WaMu.). However, when the sole goal of a company is to be the biggest, trouble can arise and did. We both know that if BofA hadn't bought Countrywide, CW would have gone under. I wish you luck with the merger but expect big changes. BofA is a conservative bank and will underwrite accordingly. Also, expect a name change and significant job losses. They may say otherwise but so did WaMu. and Indymac before shuttering their wholesale and their doors respectively. Have a nice day!
Paul
Paul,
Your email is full of blanket opinions about Countrywide and Bank of America. Are there any facts behind this? And what does "tooting a horn" mean in this context?
I do expect a name change. It has already been determined that this will take place. ALL banks will be going conservative because that is where the market is headed. We will be even more conservative, however, with products we offer 3rd party institutions because the foreclosure rate on loans purchased from 3rd party vendors has a default rate 3 times higher than those loans that were booked on the retail side.
We will all be over-regulated for awhile. Yes, Countrywide likely would have had to file bankruptcy had BofA not purchased us, but hundreds of banks will go down because of this situation. Not because they were bad banks, but because of liquidity issues that start up at the investment banking level.
In regards to BofA going under....this is crazy talk. Bank of America is the largest bank in the world...and is now the largest mortgage enterprise in the world. BofA going under would be an economic disaster-this isnt something that the federal gov would allow. Not to mention that Bank of America is currently the most liquid of all institutions right now...with 8.8% of their total portfolio in reserve.
Thank you.
Christina: I don't think I ever mentioned that BofA would go under. I don't see that happening. The big banks will survive; there may be some mergers but business will go on. Regarding your comment about me having any facts behind my opinion, the answer is no. I have been in the business world for over 25 years now so have seen my share of cycles if that helps. I will tell you this. Last summer I blogged about Countrywide's problems and merger with BofA before it happened. It turns out I was right. I'm not always but I do pay attention. A reporter from Inman News interviewed me after the merger was announced as he had read my blog. Understand that this forum is for opinions whether they are right or wrong. I'm not out to celebrate the demise of any financial institution. Frankly I think it's sad as so many good people have lost their jobs. I understand your position and appreciate your stance. And I wish you luck. Have a great day!
Paul
I gotcha. I'm a young buck dependent on the facts. Your experience goes beyond that. C'ya around. Have a great weekend!
Thanks. You do the same!
Paul