Posted on 08/24/2007 6:41:18 AM PDT by Hydroshock
NEW YORK (CNNMoney.com) -- Countrywide Financial, the nation's biggest home lender and one of those most affected by the subprime mortgage crisis, found itself the target of stinging criticism Thursday from an organization trying to help homeowners in peril.
The Neighborhood Assistance Corporation of America said Countrywide (Charts, Fortune 500) was not doing enough to help people who took out subprime adjustable-rate mortgages (ARMs) over the past few years and now may lose their homes. Subprime loans are issued to borrowers with poor credit histories who often lack the funds to make large down payments.
Justin Urquhart Stewart of Seven Investment Management joins CNN to talk about mortgages and the markets. Play video
Millions of homeowners are considered at risk of foreclosure as adjustable-rate mortgages reset at higher interest rates over the next year or so. NACA has committed $1 billion to helping some of those borrowers by refinancing their mortgages, but says it can't meet its goals unless lenders like Countrywide cooperate.
Countrywide CEO: Outlook grim NACA CEO Bruce Marks called on Countrywide to take more active steps to provide its borrowers with terms they can meet to help them keep their homes, something Countrywide said it is already doing
(Excerpt) Read more at money.cnn.com ...
“Subprime loans are issued to borrowers with poor credit histories who often lack the funds to make large down payments.”
Seems to me that someone with poor credit history should not be given a loan at all.
Sorry, but this does indeed smack of predatory activity, especially since the corporation knew ahead of time that these people were a poor risk.
There’s enough “blame” to go around on both sides in my opinion.
Agreed.
Look at some of the crap on the NACA website:
https://www.naca.com/about_naca/nacaHistory.jsp
https://www.naca.com/refinance/refinanceQuestionaire.jsp
Starts off OK, but as you read on, basically any loan that the customer doesn’t like, or has an interest rate more than a half-point over the lowest fixed rate available is considered “predatory” even if borrower has horrible credit BEFORE doing the loan.
Isn’t it a federal offense to lie on a mortgage application?”
I heard that as well, but in the context that it was the mortgage brokers that were inflating the income figures. The borrowers signed those phony documents, of course, but my guess is that most of them didn’t even know that they had been rigged.
Using Dangle to back up NACA says a lot about Hydroshock’s worldview...and it isn’t what most people might call “conservative.”
They should just ban stupidity, and it will all go away.
Then Wall Street would be a ghost town.
Here’s a novel idea-how about instead of schools teaching young skulls full of mush about global warming, and how to put a condom on a cucumber they return to teaching things such as economics and the economics of running a household.
ping
BackToTheTop
That's a blanket statement that is not completely accurate. It really depends on several factors. First, why is their credit bad? Is it a habitual thing, or something that happened and has been corrected? Realize that a rash of late payments 3 years ago from a job loss, that you've caught up on and redeemed still pulls your FICO scores down - and since you're not really a major risk in that circumstance, something should be available to you. Or - perhaps a divorce? That's different than someone who, over 10 years of credit history, has never paid a single bill on time. It's that latter group that is the problem. Subprime used to be for the first example, but too many of the last example didn't perform as well.
Agreed. This is total crap.
Morning RR :)
How are things?
You’re right in your breakdown of the history of a poor credit risk.
But then I highly doubt those people who are in the unfortunate role of having their credit ruined by forces outside of their control are going to be biting into an ARM in the first place.
Generally speaking those folks are going to do what they can to repair their credit first and then go after a fixed rate loan.
That still leaves the great unwashed masses that think past due notices are mere suggestions for payment.
Not bad, just goofing off this morning waiting for my corporate assistant to get done with his morning meeting :)
All ture, but keep in mind, even know only 2-7% of subprime loans are in or near delinquent status. Most of this is hype that makes things 100 times worse than they really are.
Yeah, lenders should tighten guidelines. And they have. But the liquidity crisis is deeper than that and is rooted mostly in overreaction.
Blaming realtors is off the mark. For most realtors, they couldn't care less about 6% of some marginal amount squeezed out of a sales price.
For example, say your house sells quickly for $375,000 and yields a $22,500 commission (6%) for your realtor at closing. Do you really think that any realtor would prefer that you hold out for $400,000 (thereby costing your realtor time and marketing expenses, and risking her listing getting old and expiring) just so she can maybe pocket an extra (relatively) measly $1,500 (6% of $25,000) a few months down the line?
Here's a tip for home sellers: Your realtor wants you to demand as low a price as possible for your house. She wants her commission, and she wants it as soon as possible.
You are so right on.
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