By Moe
George Miller, executive director of the American Securitization Forum made the above comment in an interview earlier this month along with this comment in regards to a mass loan modification approach, ““It is really an indiscriminate procedure that would violate the terms of the contract that provide for loan-by-loan decision making.”
First of all, I understand contracts and I understand the term “reasonable expectations”. My question to Mr. Miller is, “Just what the hell do you expect as a “return” from these $7.1 trillion in contracts backed by what appears to be a lot of toxic, mortgages?”
I also completely understand the theory of doing loan modifications on a case by case basis. One by one. Great theory for investors.
Makes sense right? Well, yes and no. It makes sense because that would be the best way to insure investors get the returns that they were “expecting” on their “contracts”. Great approach to a perfect world where we have all the time in the world to go door to door in every neighborhood in America and fix loans one by one.
But what is best for our country and its economy? This has went far from the point of honoring contracts to the point of a complete economic break down and uncertainty.
We now have to “act” to repair the damage that has been done.
Unfortunately we do not live in a perfect world and we do not have time to clean up these loans, one by one. This is reality and not Moe being Mr. Doom and Gloom.
U.S. Treasury Secretary Henry Paulson is trying to forge an agreement with lenders and servicers to modify loans en mass to stem the surge in foreclosures by giving troubled borrowers more affordable loans.
Paulson is planning to addresses a housing conference on Dec. 3, held a 1 hour meeting yesterday at the Treasury Department in Washington with federal regulators, bankers and lobbyists. Apparently Citigroup Inc., Wells Fargo & Co. and Washington Mutual Inc. were in attendance.
These excerpts are from a Bloomberg.com article.
“One of the roles of Treasury is to say `come on, let’s get together and see what we can do,”’ said Wayne Abernathy, executive director of financial-institutions policy at the American Bankers Association in Washington and a former Treasury assistant secretary. “You’re likely to come up with something that will work both in the marketplace and honor the sanctity of the contracts involved.”
Federal Deposit Insurance Corp. Chairman Sheila Bair, Comptroller of the Currency John Dugan and Office of Thrift Supervision Director John Reich were present at the meeting. Also present was the American Securitization Forum, which lobbies for investors, traders, underwriters, accounting firms, ratings companies and other institutions involved in the creation and sale of mortgage-backed securities.
“We support loan modifications in appropriate circumstances and are working to establish systematic procedures to facilitate their delivery,” Katrina Cavalli, a spokeswoman for the Forum in New York, said in a statement.
Jennifer Zuccarelli, a Treasury spokeswoman in Washington, declined to discuss the meeting in detail. “We are encouraged progress is being made,” she said.
Rising defaults “will take the housing market down another level,” said Mark Zandi, chief economist at Moody’s Economy.com, who will attend the conference featuring Paulson next week. “In the context of an economy that is not in recession, but pretty close, we will be in a recession right in the teeth of a presidential election.”
The rout will get worse because defaults on home loans are likely to rise, analysts said. The FDIC estimates that 1.54 million nonprime mortgages valued at $331 billion will reset by the end of next year.
Seeking Data
Regulators still lack reliable estimates on the extent of the subprime mortgage crisis.
Three months after they asked banks to modify loans for borrowers at risk of default, agencies have little comprehensive data on what lenders and loan servicers have done, officials say.
“We need more granularity about what kind of modifications are being done,” Sheila Bair, chairman of the FDIC, said in an interview in Washington earlier this month. “There needs to be agreement and commitment to modify the loans, and there needs to be a transparent process whereby we can monitor the agreement.”
The Treasury has urged the Mortgage Bankers Association to gather precise data on loan modifications.
“There is obviously a need to have more comprehensive data out there on what servicers are doing for borrowers,” said John Mechem, an MBA spokesman in Washington.
Bair Stance
Bair has offered a specific initiative: Borrowers with adjustable-rate subprime mortgages living in their homes and unable to afford resets should be given extensions on the starter rate for at least five years or offered 30-year fixed-rate loans. Because introductory rates are as much as 2 percentage points above 30-year prime rates, they are still “an above-market rate of return,” she said.
Mortgage-industry lobbyists have argued an across-the-board solution is difficult to apply. Rewriting contracts also risks moral hazard — encouraging borrowers to take on more debt in the expectation of being bailed out if needed later.
Moe,
Have anything worthwhile to say? What about interest rates being at an all time low or Countrywide helping over 50,000 families stay in their homes?
You can help the market by saying what is good or is that against the rules within today’s media frenzy circus?
These people didn’t make their payments……….Sorry if it seems harsh but if you don’t pay your bills you can’t have the priviledge of ownership. This is about your moral obligation to repay a loan that you made a commitment on.
You are missing the point. Borrowers are being charged bogus fees, making it impossible for some to ever catch up because they are being robbed by BS fees.
John,
I have reported on Countrywide helping a measily 50,000 borrowers. Did you know that there are over 500,000 that need help and are at risk of foreclosure with Countrywide?
50,000 is not enough and I will report the truth. If is positive, I will report that. Unfortunately, great rates and helping 50,000 people is propaganda that seems to influence you. They did a good job with you, sorry it doesn’t work for me.
I want to see 250,000 borrowers and more mortgage products.
Beleive me, if I had great things to post, I would.
Lenders will also try to sneak in pre-paymment penalties and act like it was a mistake if you should catch them. Inregards to legal fees that is a major business for the attorneys,banks and the people putting the deals togethor.
Thanks for the comment. I truly appreciate that!
help me!!!!! please!!!! countrywide is robbing me> I have a 13percent arm and they will not refinenace me. My home is now in foreclosure.
I am disabled and a vet of the marine corps. my wife is the only one working. Still countrywide will not help!!! refinenace us. WHY!!!
Michael, please call me on my cell 951-271-6283. I will see what I can do to help. I am very interested in reporting on your story.
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I first was in contact with countrywide back in Sept. of 2007, Spoke with Gary Baxter of Peoria, AZ office. Mr. Baxter said that he would pull my credit, call me within the hour, and go from there. No call back and it took a week of me constantly calling to speak with him leaving messages, email, and sent to Voice mail to finally have Mr. Baxter to take my call. I than ask Mr. Baxter what was the situation with my credit and further assistance.Mr. Baxter than tells me my credit score was not high enough and he really could not help me. (Refinance) Which is funny that I was responding to Countrywide Expedited delivery letter that I received From Countrywide “Preferred Customer Invitation A free Refinance Consultation “letter and the rep Referred me to my local office and that’s When I spoke to Gary Baxter of Peoria, as office. My credit score was not high enough. Alternatively, was it that Mr. Baxter was not going to make enough to make it worth his while? I am still back in forth with Countrywide. Nobody calls back! I have documentation of every call I have ever made. We do not want to lose our home and have made every effort on daily basis to talk to them! DAILY!
Pre-payment was one of the reasons of the no refinance, which I was told a year after I bought home I could Refi. I wrote my hardship letter to Countrywide Oct 07, 2007, I was told that they sent out a letter of denial of loan Mod. Back in Feb of 2008, which never got, next day I call again and a different rep tells me that it is still being work on by negotiator, and that I should get on my knees and pray for a miracle and if I believed in God I needed to get on my knees and do some praying! I have heard it all and have pages of notes, dates, Names, and details between conversations of this run around that I have gone through! I love my house and want to raise my children in it, but it is almost time to say enough with Countrywide and be done with. In addition, Countrywide bought out our loan from Mortgage lenders. We did ask for this horror story>>>
It is shocking to see anyone have the balls to write something good about countrywide. I fell behind on my mortgage after i lost my company last year. After several attempts to contact them and being cut off i finally reached a human. They told me to find a buyer and submit a short sale offer. I did just that on Dec.17th. I called every other day, i would get a different story almost every time. 4 days before my home was being foreclosed on they decided to call me back and postpone the sale and try to follow through with the short sale. for 5 months i called and spoke to over 100 people, never the same person. they told me not to worry that it would be given to a specialist within a few day. I have never seen such a mess. Mike
P.S., Moe I have tried to reach your office, I leave a message and I do not receive a call back. It is possible you are calling back from a blocked number which I do not answer. If I had an e-mail address i could give you the full story and the results of my analysis of RESPA and Truth in Lending problems with my 2 loans from Countrywide. I am a real estate broker and I am familiar with the laws fairly well. Thank you, Mike
In response to Gary Smith, Countrywide employees do not get paid on a loan to loan basis like a broker. So maybe Mr Baxter and Conutrywide could not help you. It would not be in his best interest to turn down a loan. Maybe your credit score wasn’t high enough and therefor were not eligible for a loan. When homeowners sign papers, maybe they should read the agreement before signing. Makes sense right? All the blame is on Countrywide, I find it hilarious. Take credit for your own actions and maybe learn how to spell before you write on every blog on the net.
I feel you Gary Smith. Gary Baxter is a shady character and on top of that, he has a small crank.
Hello to all… I am new to the forum.
Mr. Nunis is pleased to admit that he gives other people a chance to make their own financial decisions, manage risks, and obtain profits. He is full of plans and tasks for the future, and hopes to realize many other triumphant innovative projects. His advice to every one seeking success and financial stability: Do not be afraid of trying! If you want something very much – go for it!