mj11

Forcing Countrywides hand scenario?

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My parents interest rate just jumped increasing the payment by 1k. Countrywide will not refinance it do to LTV issues. If they called CW and said, "we have made our last payment, where shall we send the keys," what is the likelyhood of them being more interested in lowering the rates? To take it a step further, if they actually did not make the next 1-2 payments and it went to the workout dept and then they agreed to refinance could they tell CW that, "ok we can start making the payments again but we need to have the 2 lates removed from our CR or no deal."

I had to go to workout with CW in 2002 when they were killing it and they were pretty willing to work with me. Today with them being in a world of hurt I would think they would be even more willing.

Any input?

Thanks!

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How much equity in the home? CW might decide it's more profitable to just foreclose and auction it.

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It's around 450k, they owe 399k with a 50k LOC. It was appraised at 550k 2 years ago....

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Don't count on an appraised value from 2 years ago. A lot has happened in the RE market since then.

Their opportunity to work with CW will not increase if the loan becomes delinquent or goes into default. CW isn't telling your parents that the requested LTV is too high because they don't like them, want to take their home, ruin their credit or anything else. The company has guidelines that must be followed on issues like scores, insurance requirements, DTI, LTV and all the other stuff associated with a loan. At each stage of the process, these guidelines are checked and doublechecked so that no variant loans fall through the cracks. This generalization is important because of what happens to loans after closing.

If your parents don't qualify at the current LTV, they will have to find another lender with higher limits or borrow less money.

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Equity and bond prices indicate that a BK filing for Countrywide (CFC) is imminent. The swiftness of the unravelling has been breathtaking.

I doubt CFC will do the refi in that situation.

Rates are coming down nicely with the likelihood of recession forcing the FED to cut rates significantly. Can they a) refi now with another lender? They have equity, at least on paper. or B) Hang in another few months and let their adjustable interest rate drop to reduce required payments?

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Can't they go elsewhere to refinance?

I just refinanced a lady who has her loan with CW, she called them the very same day before talking to me, and they told her "No way". That her DTI was too high. I ran everything and got instant approval for her. Set to close end of next week. :) I dont understand HOW they couldnt do it. Her credit scores were mid-high 700's!!

Seems they are either getting lazy or they have some highly inexperienced loan officers working for them.

Yet another reason to dislike them....:::sigh:::

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mj11, the issue with the LTV being too high might be because your parents are in a declining market... in a declining market the max financing is being trimmed down by 5%, so 100% financing turns into 95% max financing just because they are in a declining market. If they are in Maricopa County you are going to run into that issue with a lot of lenders.

Have they tried talking to Countrywide's loss mitigation department? That is much different than calling up Countrywide to refinance. Countrywide's refinance department does NEW loans, their loss mitigation department works with CURRENT loans.

You can find other's Countrywide's loan modification stories at http://www.loansafe.org/forum/index.php (Foreclosure Avoidance & Loan Modification Help forum)... you'll find that Countrywide is slow to respond due to their languishing stock price, heavy volume, and basically being a bit more uncoordinated than your typical lender.

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It will be interesting (and I hope CNN is correct) if BofA takes over CWides business. That will at least stop the rumors of them going BK.

Working with their Loss Mitigation office is the smart thing to do. CountryWide just wants/needs their money, every month. It is not in their interest to have a vacant house with 0 income

Charles

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Overnight, the deal looks like it was made. BoA will purchase Countrywide if ratified. It appears to be solely a stock-for-stock swap acquistion valuing each share of CFC at $7 and change.

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Thanks to Shane I found the loansafe.org site, there is a lot of great info on the site, and people willing to help out. I am currentley facing some major choices regarding our house in Maricopa County. We also have a loan with CW that adjusted in Nov, I began calling them in Aug with no results as of yet. They are the worst to deal with, and ARE NOT WILLING TO HELP unless you are already late or close to foreclosure, it is a waiting game with them. I am not late on any payments, but I do have a 2nd mortgage. I am unable to refi because of the market conditions, and all indicators show that I owe more than my house is worth right now, about 40-50k. When I purchased this house 4 years ago, we were only planning to stay in this area until my son graduated hgh school, which he did in April 07. Market was decling at that time, so did not list for sale. I am currentley driving over 110 miles a day to work, and gas is not getting any cheaper. 1st mtg payment went up about 400 amonth and will adjust again in March. Not sure what to do at this point. Do i just keep paying mortgage payments for nothing, not gaining any equity, losing equity daily, because of bank owned properties and short sales. We are desperate and I don't know what to do next.

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cld, like any difficult plan in life, you'll need to weight out your options... you obviously know how much living in your home is costing you now, but if you can weather out the storm (how long that'll be is tough to say) you'll maintain credit, and be able to refinance into a fixed rate at some point. The other option is to move to someplace closer to work, calculate the savings in housing expenses + the gas, your desire to own a home, and determine if staying in the home or moving will help accomplish your goals at a quicker rate.

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I would suggest that you look into the FHA Secure program. If your first mortgage is less than 95% of the current value of your home and if the holder of the 2nd mortgage will re-subordinate to a new first mortgage (and most will) then you could end up with a lower payment on your first that you probably started out with-and have a fixed 30 year mortgage.

Charles

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Thank you Shane and Charles for the advice... FHA Secure won't work for us because we are over the max loan limit for our county, not to mention I don't believe our house will appraise, all indicators in my subdivision, show that we are in the red about 40k, and decreasing. The number of bank owned and short sales keep bring my value down.

Accepting what is going on is definetly harder that I thought, I need to take the emotion out of it and make the best decision for my family, and make that work.

Thanks again

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That's true. You need to put emotion aside and look at the pros and cons--staying or moving. There is a lot to consider, including would it be cheaper to rent a room where you work and only drive back and forth once or twice a week?

I knew someone that found the home where he wanted to retire. He still had several years left. He bought the house, moved his family, and then he rented a room from someone near where he lived. He only went home on weekends.

Can you rent your house out? If so, could you get enough to pay the mortgage? If not, could you save enough on gas by moving to make up the difference? You would get some tax breaks by renting out your house.

You may need to rent where you are moving for a while, until the market improves.

Think outside the box and see what you can come up with.

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